The Present Value Factor for an Annuity

question 206

Multiple Choice

The present value factor for an annuity:

• A) is less than the number of years in the annuity.
• B) approaches a value of infinity for a perpetuity.
• C) is greater than the number of years in an annuity.
• D) a and b
• E) None of the above

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Definitions:

ATP

Adenosine Triphosphate, a molecule that carries energy within cells, facilitating various cellular processes.

Alcoholic Fermentation

A biological process in which sugars such as glucose, fructose, and sucrose are converted into cellular energy and thereby produce ethanol and carbon dioxide as byproducts.

Ethanol

Ethanol is a volatile, flammable, colorless liquid commonly used as a fuel additive and in alcoholic beverages.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration, absorbed by plants in photosynthesis.