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One acre of agricultural land has been given on a lease till perpetuity at an annual rent of Rs. 10,000 to be paid at the end of each year. Net Present Value of the land parcel in Rupees assuming a discount rate of 5% per annum is ___________
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- 200000 to 200000
- 300000 to 350000
- 100000 to 200000
- 50000 to 150000
Correct Option: A
Net Present Value = Annual Rent (annual net income) × | ![]() | ![]() | |||
interest rate |
(Capitalized value in perpetuity) = 10000 × | ![]() | ![]() | = 200000 | ||
5 |