Which of the following is a special case of annuity, where the stream of cash flows continues forever?
Correct answer: D. Perpetuity
- A. Ordinary Annuity
- B. Special Annuity
- C. Annuity Due
- D. Perpetuity
Explanation
A perpetuity is an annuity whose equal cash flows continue indefinitely. Ordinary annuities and annuities due have a specified number of payments.
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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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