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1.    the formulas for the present value of a perpetuity (aka: no-growth

perpetuity) and the present value of an ordinary annuity (aka: finite series of cash flows):


                                                          (I)
                                            (II)
 
With and .  We know that  converges to  as n approaches.  Create a numerical example to show that this is so and explain the relevance of this convergence with respect to the estimation of income property valuation.

Subject: Business, Finance

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