In payment for his help with the construction of Valhalla, Wotan offers Fafner two alternatives. First, he offers $1,260 per year forever (with the first payment in one year)
Second, he offers his sister-in-law, Freia (the girl with the golden apples). If Fafner thinks that Freia is worth $12,000 and his required rate of return is 10.5%, which of the following is correct?
A) Freia is more valuable.
B) The perpetuity is more valuable.
C) The two are equal in value. He is indifferent between them.
C
You might also like to view...
On December 31, Strike Company sold one of its batting cages for $50,000 . The equipment had an original cost of$310,000 and has accumulated depreciation of $260,000 . Depreciation has been recorded up to the end of theyear. What is the amount of the gain or loss on this transaction?
a. no gain or loss b. loss of $50,000 c. gain of $50,000 d. cannot be determined
Segregation of duties in the computer-based information system includes
a. separating the programmer from the computer operator b. preventing management override c. separating the inventory process from the billing process d. performing independent verifications by the computer operator
Consider the data above for a simple economy: Using 2011 as the base year, calculate nominal GDP, real GDP, and the GDP deflator for 2016. Show your work.
How does the income statement differ from the statement of cash flows?
What will be an ideal response?