A series of constant cash flows that occur at the end of each period for some fixed number of periods is ____________ .
Correct answer: A. an ordinary annuity
- A. an ordinary annuity
- B. annuity due
- C. multiple cash flows
- D. perpetuity
Explanation
An ordinary annuity consists of equal cash flows received at the end of each period for a stated number of periods. An annuity due has payments at the beginning of each period, while a perpetuity continues indefinitely.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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