7 Suppose the present value of a 5-year ordinary annuity is $1,350. If the discount rate is 9 percent, what must be the annual cash flow? A $312.85 B $279.03 C $347.07 D $378.96
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The present value of an ordinary annuity formula is: \[ PV = C \times \left(1 - (1 + r)^{-n}\right) / r \] Where: PV = present value of the annuity C = annual cash flow r = discount rate n = number of periods Show more…
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