Find the initial cash flow

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Questions -

Q1. Find the value of receiving $350 per month in perpetuity if the interest rate is 6 percent compounded monthly.

Q2. Find the value of receiving $450 growing at a rate of 0.5 percent each quarter in perpetuity if the interest rate is 6 percent compounded quarterly. Assume the first cash flow is received immediately.

Q3. Suppose an investment costing $15,600 generates semi-annual cash flows growing at 2 percent indefinitely. If the interest rate is 8 percent, find the initial cash flow. Assume the first cash flow is received immediately.

Reference no: EM132767575

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