Which Is Greater,the Present Value of a Five-Year Ordinary Annuity

question 105

Multiple Choice

Which is greater,the present value of a five-year ordinary annuity of $300 discounted at 10%,or the present value of a five-year ordinary annuity of $300 discounted at 0% that has its first cash flow six years from today?

• A)The first annuity because the cash flows occur sooner.
• B)The second annuity because the cash flows are discounted at a 0% interest rate.
• C)The two annuities are of equal value.
• D)The answer to this question cannot be determined.

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Goal Acceptance

The degree to which individuals and groups agree with and commit to achieving specific goals.

Specific Goals

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Difficult Goals

Targets that are challenging and hard to achieve, often requiring extra effort and determination.