Which of the Following Most Accurately Describes an Annuity

question 80

Multiple Choice

Which of the following most accurately describes an annuity?

• A) an investment which produces increasing cash flows over time
• B) a series of unequal cash payments made at equal time intervals
• C) a stream of equal cash payments made at equal time intervals
• D) a term that does not apply to mortgage payable or bond payable

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Definitions:

Markup

The amount added to the cost of goods to cover overhead and profit; a percentage of cost.

Direct Labor

Labor costs directly associated with the manufacture of specific goods or the delivery of specific services, representing wage expenses for personnel involved in production.

Absorption Costing

An accounting strategy where the price of manufacturing a product is determined by adding up expenses on direct materials, direct labor, and every overhead cost, be it variable or fixed.

Markup

The extra charge applied to the acquisition cost of items intended to offset operating costs and secure a profit, which defines their market price.