Which of the Following Statements Is True

question 84

Multiple Choice

Which of the following statements is true?

• A)The process of discounting is the inverse of the process of compounding.
• B)Ending balances using simple interest are always greater than ending balances using compound interest at positive interest rates.
• C)The present value of an annuity due is always less than the present value of an equivalent ordinary annuity at positive interest rates.
• D)The future value of an annuity due is always less than the present value of an equivalent ordinary annuity at positive interest rates.

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Definitions:

Labor Intensive

Describes production processes or industries that require a large amount of labor relative to capital to produce goods or services.

Fixed Asset Investments

Long-term investments in tangible assets such as property, plant, and equipment, intended for use in operations.

Trade-In Allowance

The value subtracted from the price of a new item when an old item is given as part of the deal.

Book Value

The net value of an asset or company calculated by total assets minus intangible assets (patents, goodwill) and liabilities.