Which of the Following Comparison Statements Is True

question 100

Multiple Choice

Which of the following comparison statements is true?

• A) An annuity has equal payments, a perpetuity does not.
• B) Both an annuity and a perpetuity have payments with equal values.
• C) An annuity covers a longer period of time than a perpetuity.
• D) An annuity has a constant rate of return, a perpetuity does not.
• E) An annuity has a different rate than a perpetuity.

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Definitions:

Pretax Income

Pretax income is the amount of income earned by a business before taxes have been deducted.

Fixed Costs

Costs that do not change with the level of production or sales volume, such as rent or salaries.

Variable Costs

Costs that vary in direct proportion to changes in the level of production or sales volume.

Sales

Transactions involving the exchange of goods or services for money, contributing to a company's revenue.