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Anna35 [415]
3 years ago
9

Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer t

he following questions.
1. Which of the following are characteristics of a perpetuity?
Check all that apply.
A. A perpetuity is a stream of unequal cash flows.
B. A perpetuity is a stream of regularly timed, equal cash flows that continues forever.
C. The value of a perpetuity cannot be determined.
D. The value of a perpetuity is equal to the sum of the present value of its expected future cash flows.
Business
2 answers:
Vesnalui [34]3 years ago
6 0

Answer:

The correct answers are letters "B" and "D": A perpetuity is a stream of regularly timed, equal cash flows that continues forever; The value of a perpetuity is equal to the sum of the present value of its expected future cash flows.

Explanation:

Perpetuity means endless. In finance, a perpetuity is a flow of money that will be regularly received without a specified end date. The definition of perpetuity is used when determining an annuity's present value. The formula for this is:

PV = \frac{C}{R}

  • <em>PV</em><em> = present value </em>
  • <em>C</em><em> = cash flow </em>
  • <em>R</em><em> = discount rate </em>

In other words, perpetuity equals the sum of the present value of the stream of future cash flows.

Ratling [72]3 years ago
3 0

Answer:

The answer is D. The value of a perpetuity is equal to the sum of the present value of its expected future cash flows.

Explanation:

verification.

A perpetuity is an annuity that has no end, or a stream of cash payments that continues forever.

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Arisa [49]

The increased pessimism will affect the aggregate demand curve by: shifting the aggregate demand curve to the left.

<h3>What is Aggregate Demand Curve?</h3>

An aggregate demand curve can be described as curve that shows the total spending that is made on domestic goods and services based on different price levels.

When the aggregate demand curve shifts to the right, it means demand is increased. However, wen aggregate demand curve shifts to the left, it means demand decrease.

Recession that happened in 2007-2009 that made many consumers pessimistic about their future incomes discourages buying. This leads to a decrease in demand which will make the aggregate demand curve to shift to the left.

Therefore, the increased pessimism will affect the aggregate demand curve by: shifting the aggregate demand curve to the left.

Learn more about aggregate demand curve on:

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