In Which of the Following Situations Will an Annuity Table

question 81

Multiple Choice

In which of the following situations will an annuity table be useful?
I.Calculating the net present value of an investment with equal cash flows for the first nine years, but a different flow in year 10
II.Calculating the internal rate of return of an investment with unequal cash flows each year
III.Calculating the net present value of an investment with an equal cash flow in years one through four, and a different equal cash flow in years 5 through 10

• A)I, II, and III
• B)II and III
• C)I and III
• D)I and II

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Definitions:

Negative Externalities

Costs imposed on a third party not involved in a transaction, such as pollution from a factory affecting nearby residents.

Technology Spillover

Occurs when technological advances or innovations benefit other sectors or industries, beyond the original intention.

Negative Externality

A cost that affects a party who did not choose to incur that cost, often associated with environmental, health, and social issues.

Government Subsidized

A financial contribution provided by the government to support industries, businesses, or individuals, often aimed at achieving economic or social objectives.