When the Present Value of an Annuity Is Calculated as of Two

question 86

Multiple Choice

When the present value of an annuity is calculated as of two or more periods before the payment of the first cash flow, the annuity is

• A) an ordinary annuity.
• B) a deferred ordinary annuity.
• C) a compound annuity due.
• D) a compound ordinary annuity.

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Definitions:

Final Price

The total amount charged for a product or service, including all taxes, fees, discounts, and additional charges, at the point of sale.

Cost, Volume, Profit

An analysis tool used in managerial accounting to determine how changes in costs and sales volume affect a company's profit.

Setting Step

The process of establishing a stage or level in a procedure or activity.

Approximate Price Level

An estimated cost or price range of goods or services in a particular market or sector, often used for budgeting or planning purposes.