Finance Chapter 4

Differentiate between two types of cash flows.
- Inflows are positive cash flows (+)
- Outflows are negative cash flows (-)
What is the difference in a Perpetuity and an Annuity?

Annuities have a finite series of cash flows. A Perpetuity has an infinite series of cash flows.
What is a Growing Perpetuity and a Growing Annuity?
- When cash flows do not remain the same and grow at a constant rate.
- g = growth rate of cash flows
What do T and t represent?
- T = Time of last cash flow
- t = Time of 1st cash flow

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Chas

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Finance Chapter 4

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Finance Chapter 4

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2018-02-02T18:37:51Z