Investment X and Investment Y are both growing perpetuities with initial cash flow of $100. Both investments have the same interest rate (r). The present value of Investment X is $5 000, while the present value of Investment Y is $4 000. Which of the following is true?单项选择题

题目图片
A

a. Investment X has a lower growth rate than Investment Y.

B

b. Investment X has a higher growth rate than Investment Y.

C

c. The answer cannot be determined without knowing the interest rate for both investments.

D

d. This makes no sense—with the same initial cash flow and the same interest rate Investment X and Investment Y should have the same present value.

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