You have the opportunity to buy a perpetuity which pays 1,000 ...

[appyboo]

You have the opportunity to buy a perpetuity which pays 1,000 annually. Your required rate of return on this investment is 15 percent. You should be essentially indifferent to buying or not buying the investment if it were offered at a price of:
 
  A) 5,000.00
  B) 6,000.00
  C) 6,666.67
  D) 7,500.00
  E) 8,728.50

Question 2

The financial manager selecting one of two projects of differing risk should
 
  A) choose the project with less risk even though that project has less return.
  B) select the project with the larger risk-adjusted net present value.
  C) choose the project with greater return even if that project has greater risk.
  D) choose the project with the least relative risk.

[Kimmy]

Answer to Question 1

C

Answer to Question 2

B