Which of the Following Tables Would Show the Smallest Factor

question 87

Multiple Choice

Which of the following tables would show the smallest factor for an interest rate of 10% for six periods?

• A) Future value of an ordinary annuity of 1
• B) Present value of an ordinary annuity of 1
• C) Future value of an annuity due of 1
• D) Present value of an annuity due of 1

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Definitions:

Present Value

The current valuation of upcoming cash flows or a lump sum of money, discounted at an established rate of return.

Sunk Cost

An expense that has already been incurred and cannot be recovered, which should theoretically not influence any future financial decisions or strategies.

Expensed

The act of charging costs to expense accounts, recognizing them in the income statement in the period they were incurred.

Operation

In a business context, operation refers to the day-to-day activities necessary for running a company, which can include production, distribution, and the provision of services.