Answer:
$100,000
Explanation:
Data provided
Perpetual cash flow = $10,000
Discount rate = 10%
According to the given situation, the computation of Present value of this inginite sequence of cash flow is shown below:-
Present value = Perpetual cash flow ÷ discount rate
= $10,000 ÷ 10%
= $10,000 ÷ 0.1
= $100,000
Therefore for computing the present value we simply applied the above formula.
