Which One of the Following Statements Concerning Annuities Is Correct

question 55

Multiple Choice

Which one of the following statements concerning annuities is correct?

• A)The present value of an annuity is equal to the cash flow amount divided by the discount rate.
• B)An annuity due has payments that occur at the beginning of each time period.
• C)The future value of an annuity decreases as the interest rate increases.
• D)If unspecified, you should assume an annuity is an annuity due.
• E)An annuity is an unending stream of equal payments occurring at equal intervals of time.

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Definitions:

Disposal of Asset

The process of selling, scrapping, or otherwise disposing of a company's asset.

Copyright

A legal right granted to the creator of an original work, protecting it from unauthorized use.

Intangible Assets

Non-physical assets with economic value, such as patents, trademarks, copyrights, and goodwill, that are expected to provide benefits to a business over multiple periods.

Journalize

The act of recording financial transactions into the journal entries of an accounting system.