alleryStart learning →Perpetual inflow of Rs 12,000 a year at 10 percent against an outlay of Rs 1,00,000 gives what PI?
A1.32
B1.10
C1.20
D0.83
Answer & Solution
Correct answer: C. 1.20
PV of the perpetuity is 12,000/0.10 = 120,000, so PI = 120,000/100,000 = 1.20.
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