Answered: What type of annuity is a Sinking fund?

Business

Accounting

What type of annuity is a Sinking fund?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 1Q

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Question

1) What type of annuity is a Sinking fund?

2) Maturity value is equal to principle plus interest when considering a Promissory Note?

a. True

b. False

3) Depreciation expense results in an indirect tax savings

a. True

b. False

4) The monthly payment is calculated by totaling the finance charge and the amount financed divided by the number of payments of the loan.

a. True

b. False

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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