In which of the following type of annuity, cash flows occur at the beginning of each period?
Correct answer: B. Annuity due
- A. Ordinary annuity
- B. Annuity due
- C. Perpetuity
- D. None of the given optionsAccounting & Auditing
Explanation
An annuity due pays at the beginning of each period, whereas an ordinary annuity pays at the end. A perpetuity is defined by its unlimited duration, not by payment timing.
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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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