QUESTION 45 A/An_ is a series of equal end-of-the-period cash flows. A) ordinary annuity B) annuity due C) perpetuity due D) None of the above A B
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- 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.There 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…The process of reinvesting interest earned to generate additional earnings over time is ________. A. compounding B. discounting C. annuity D. lump-sum
- 4. Futurevalue of annuities II There 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. Which of the following statements about annuities are true? Check all that apply. An annuity due earns more interest than an ordinary annuity of equal time. An annuity due is an annuity that makes a payment at the end of each period for a certain time period. Ordinary annuities make fixed payments at the end of each period for a certain time period. A perpetuity is a constant, infinite stream of equal cash flows that can be thought of as an infinite annuity. Which of the following is an example of an annuity? A lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of time An investment in a certificate of deposit (CD) Becky has a large and growing…The process that determines the present value of a single payment or stream of payments to be received is ________. A) discounting B) lump-sum C) annuity D) compoundingQuestion - 2: The difference between a general annuity, a prepayment annuity, a deferred annuity and a perpetual annuity?
- TRUE OR FALSE 6. Amortized cost liabilities are subsequently measured at the present value of the cash outflows from the instrument.Describe the essential differences between the following cash flow streams: Annuity versus perpetuity Annuity due versus ordinary annuity Illustrate with an example each.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 forever
- 1. 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 methodIn excel annuity, we use the exactly same formula for payment beginning or ending payment. Question 1 options: True FalseA 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 annuity