a. What is the PV of an asset that pays $1 a year in perpetuity?
b. The value of an asset that appreciates at 10% per annum approximately doubles in seven years. What is the approx PV of an asset that pays $1 a year in perpetuity beginning in Year 8?
c. What is the approximate PV of an asset that pays $1 a year for each of the next seven years?
d. A piece of land produces an income that grows by 5% per annum. If the first year's income is $10,000, What is the value of the land?