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dangina [55]
3 years ago
5

You are comparing two annuities that offer regular payments of $2,500 for five years and pay .75 percent interest per month. You

will purchase one of these today with a single lump sum payment. Annuity A will pay you monthly, starting today, while annuity B will pay monthly, starting one month from today. Which one of the following statements is correct concerning these two annuities?
Multiple Choice
a.These annuities have equal present values but unequal future values.
b.These two annuities have both equal present and equal future values.
c.Annuity B is an annuity due.
d.Annuity A has a smaller future value than annuity B.
e.Annuity B has a smaller present value than annuity A.
Business
1 answer:
bixtya [17]3 years ago
8 0

Answer:

E) Annuity B has a smaller present value than annuity A.

Explanation:

The main premise in finances is that the value of money increases in time, e.g. one dollar today is worth more than one dollar tomorrow.

In this case, annuity A is an annuity due (payment is made at the beginning of each period). An annuity due that has the same payments and the same rates, will always have a higher present value than an ordinary annuity.

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Answer:

The correct answer is C) Potential for high growh and dividend payments

Explanation:

When you purchase a stock of a company, you do it because you expect the company to grow and have good financial results. If the company has a good financial statement at the end of the year, it will pay you a dividend, which is the proportion of the company's profits in relation to the number of shares that you possess.

For example, if company ABC earned a $1,000,000 profit in 2019, and you own 1% of shares, the dividend that you would recieve is : $1,000,000 x 1% = $10,000

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List the steps of the accounting cycle in their proper order.
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Answer:

The accounting cycle is all about managing,updating and reporting on the firm's accounts.

Explanation:

The accounting cycle can be listed in the following nine steps as:

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3 0
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Which one of the following statements is correct concerning the payback rule?
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The correct concerning the payback rule is rule is flawed because it ignores all cash flows after some arbitrary point in time.

Payback period in capital budgeting refers to the time required to recover funds spent on an investment or to reach breakeven. Example: If at the beginning of year 1 he invests $1,000 and at the end of year 1 and his second year he earns $500, it pays for itself within 2 years.

The number of years it will take to recover the money invested. For example, if it takes 5 years to recover the cost of an investment, the payback period is he 5 years.

Payback period is defined as the number of years required to recover the original cash investment. In other words, the period during which a machine, plant, or other investment has generated sufficient net income to cover its investment costs.

Learn more about Payback period brainly.com/question/23149718

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Answer:

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Explanation:

6 0
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Read 2 more answers
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