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Which of the Following Expressions Represents the Present Value of a Continuous

Question 2

Multiple Choice

Which of the following expressions represents the present value of a continuous revenue stream for n years at a constant rate of $S per year if the discount rate is r%?


A) r100S[e−m100+1]\frac { r } { 100 S } \left[ e ^ { \frac { - m } { 100 } } + 1 \right]


B) rSe−m100100\frac { r S e ^ { \frac { - m } { 100 } } } { 100 }

C) r100S[e−m100−1]\frac { \boldsymbol { r } } { 100 S } \left[ e ^ { \frac { - \boldsymbol { m } } { 100 } } - 1 \right]

D) 100Se−m100r\frac { 100 S e ^ { \frac { - m } { 100 } } } { r }

E) 100Sr[1−e−m100]\frac { 100 S } { r } \left[ 1 - e ^ { \frac { - m } { 100 } } \right]

Correct Answer:

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