The present value of a perpetuity paying Rs. 5,000 per year at a discount rate of 10% is:

A. Rs. 5,000
B. Rs. 50,000
C. Rs. 500
D. Rs. 55,000
Correct Answer: B. Rs. 50,000

PV of perpetuity = cash flow / rate = 5,000 / 0.10 = Rs. 50,000.

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