Which of the following is a series of constant cash flows that occur at the end of each period for some fixed number of periods?
Correct answer: A. Ordinary annuity
- A. Ordinary annuity
- B. Annuity due
- C. Perpetuity
- D. None of the given optionsTry Prep Courses
Explanation
An ordinary annuity consists of equal cash flows paid at the end of each period for a fixed number of periods. An annuity due pays at the beginning, while a perpetuity continues indefinitely.
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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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