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The present value of a perpetuity, with the first cash flow paid in 5 years’ time,...

The present value of a perpetuity, with the first cash flow paid in 5 years’ time, is equivalent to the present value of $150,000 that is to be paid in 14 years’ time. The perpetuity and the lump sum have a required rate of return of 10%. What is the annual cash flow associated with the perpetuity?

a.

6,361.46

b.

5,783.15

c.

6,997.61

d.

7697.37

e.

None of above

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