A level periodic stream of cash flow occurs at the end of each period --------- a. Mixed stream b. Single amount c. Annuity due d. Ordinary annuity
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- A fixed stream of cash flows occurring at the beginning of each period for a fixed period of time is known as: Select one: a. Ordinary annuity b. Constant annuity c. Annuity due d. Financial annuityThere are three categories of cash flows: single cash flows, also referred to as “lump sums,” a stream of unequal cash flows, and annuities. Based on your understanding of annuities, answer the following questions. 1. Which of the following statements about annuities are true? Check all that apply. An annuity due is an annuity that makes a payment at the beginning of each period for a certain time period. An annuity is a series of equal payments made at fixed intervals for a specified number of periods. An annuity due earns more interest than an ordinary annuity of equal time. Ordinary annuities make fixed payments at the beginning of each period for a certain time period. 2. Which of the following is an example of an annuity? A job contract that pays a regular monthly salary for three years A job contract that pays an hourly wage based on the work done on a particular day 3. Eleanor loves shopping for clothes, but considering the state of the economy, she has decided to…Which of the following is not true regarding an annuity due? Select the correct response: It is a series of equal cash flows. Payments are made at the start of each period. It is also known as deferred annuity Cash flows occurs for a specific time.
- Two cashflows A and B consist of three payments at t = 0, 1, 2 where t is in years. Cashflow A is C A 0 = .82, CA 1 = −1, CA 2 = 2 while cashflow B is C B 0 = .01, CB 1 = .8, CB 2 = 1. Find the interest rate where the two cashflows are equal (assuming the same interest rate for both cash flows.)An annuity due is one in which _____. a. payments or receipts occur at the beginning of each period b. payments or receipts occur at the end of each period c. cash flows occur continuously d. payments or receipts occur foreverTrue or False? Please explain An annuity provides a stream of cash flows for a defined period of time, while an annuity-due provides a stream of cash flows that lasts forever.
- Define effective annual rate (EAR) with examples. Differentiate between annuity cash flows and mixed stream with example1. a) the amt of interest pd in cash every payment period, 1. b) the amt of amorization to be recorded at each interest payment date.(use the straight -line methodNeed ASAP! Determine A) How much is each quarterly sinking fund deposit? B) Calculate the net interest paid in the 6th payment. (Hint: Net interest = Total Payment at time t - Principal Paid at time t) C) Calculate the Sinking Fund Balance immediately after the 6th payment is made.
- Which of the following statements is CORRECT? Statement 1. Time lines can be constructed in situations where some of the cash flows occur annually but others occur quarterly. Statement 2. Time lines cannot be constructed in situations where some of the cash flows occur annually but others occur quarterly. Statement 3. Time lines can be constructed for annuities where the payments occur at either the beginning or the end of the periodscash and cash equivalents at the beginning of the years is options are deducted fromcash and case equivalent at th end of the year deducted from net increase in case and case equivalents not considered added to net increase in case and cash equivalentsWhich of the following characteristics is a necessary feature for pricing a set of cash flows as an ordinary annuity? Group of answer choices The period of time between each cash flow must not vary. More than one of the other options are correct. The cash flows must not be a fixed, regular amount. The cash flows must occur on a yearly basis.