The value which converts series of equal payments in to the value received at the beginning of investment is classified as ___________?
Correct answer: C. present value of annuity
- A. decreased value of annuity
- B. increased value of annuity
- C. present value of annuity
- D. future value of annuity
Explanation
Present value of an annuity converts equal future payments into their equivalent value at the beginning of the investment period. Future value would place the equivalent value at the end, making option d unsuitable.
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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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