Which of the Following Is Correct Concerning Perpetuities

question 85

Multiple Choice

Which of the following is correct concerning perpetuities?

• A) Perpetuities consist of a stream of equal payments.
• B) Perpetuities have a life of between twenty and one hundred years.
• C) Perpetuities have a variable rate of return.
• D) The present value perpetuity formula for a stream of annual payments is: C/(1 + r/12)¹².
• E) Perpetuities do not occur in real life situations.

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Definitions:

Accounts Receivable

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Partnership Agreement

A legal document that specifies the rights, responsibilities, and distribution of profits and losses among partners in a business partnership.

Salary Allowances

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Income Statements

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