Question
You own a gas pipeline that requires no maintenance and will produce $2 million of revenue next year. Unfortunately, the volume of gas is expected to decline by 4.0% per year.
a.If the discount rate is 11.0% and the pipeline lasts forever, what is it worth today?
b.If the pipeline is to be abandoned at the end of 20 years, what is it worth today?
a.If the discount rate is 11.0% and the pipeline lasts forever, what is it worth today?
b.If the pipeline is to be abandoned at the end of 20 years, what is it worth today?
Answers
shikha
20000
30000
30000
cool
12500000