A perpetuity is defined as a sequence of
A: equal cash flows occurring at equal intervals of time for a specific number of periods.
B: equal cash flows occurring at equal intervals of time forever.
C: unequal cash flows occurring at equal intervals of time forever.
D: unequal cash flows occurring at equal intervals of time for a specific number of periods.
A: equal cash flows occurring at equal intervals of time for a specific number of periods.
B: equal cash flows occurring at equal intervals of time forever.
C: unequal cash flows occurring at equal intervals of time forever.
D: unequal cash flows occurring at equal intervals of time for a specific number of periods.
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- If a motion repeats after equal intervals of time, it is called a ( ) motion.
- The statement of cash flows should be reviewed for several time periods in order to determine the major sources of cash and the major uses of cash.
- Which of the following statements is false? A: The difference between an annuity and perpetuity is that an annuity ends after some fixed number of payments. B: Most car loans, mortgages, and some bonds are annuities. C: A growing perpetuity is a cash flow stream that occurs at regular intervals and grows at a constant rate forever. D: An annuity is a stream of N equal cash flow paid at irregular intervals.
- Which of the<br/>following is NOT a limitation of the payback rule? A: It does not consider the time value of money. B: Lacks a decision criterion that is economically based. C: It is difficult to calculate. D: It does not consider cash flows occurring after the payback<br/>period.
- Which of the following statements is FALSE? A: Finding the present value and compounding are the same. B: A dollar today and a dollar in one year are not equivalent. C: If you want to compare or combine cash flows that occur at different points in time, you first need to convert the cash flows into the same units or move them to the same point in time. D: The equivalent value of two cash flows at two different points in time is sometimes referred to as the time value of money.