You Are Comparing Two Annuities with Equal Present Values

question 32

Multiple Choice

You are comparing two annuities with equal present values.The applicable discount rate is 8.75 percent.One annuity pays $5,000 on the first day of each year for 20 years.How much does the second annuity pay each year for 20 years if it pays at the end of each year?

• A)$5,211
• B)$5,267
• C)$5,309
• D)$5,390
• E)$5,438

Understand the roles and social practices related to pottery and metallurgy in ancient American cultures.

Understand the basic concepts of performance measurement in terms of quantity, quality, cost, or time.

Calculate and interpret the need for action based on discrepancies between desired and actual performance.

Recognize the control equation and its components.

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Definitions:

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the owners' claim on the business assets.

Withdrawals

Funds taken out from a business by its owner(s) for personal use, which reduce the capital accounts in the company’s equity section.

Revenue

The global earnings a company obtains from its key operational trades, especially in goods or services sales.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered but not yet paid for.