an investment pays $20 at the beginning of each month. What kind of cash flow stream can this be?
options:
- ordinary annuity
- annuity
- perpetuity
- present value
- annuity due or perpetuity
sorry, this is just a theory question... thank you
An annuity is a cash flow either income or outgoings, involving | |||||||
the same sum in each period. | |||||||
That means an annuity is the receipt or payment of equal | |||||||
cashflows per period. | |||||||
Perpetuity is a stream of payments or type of annuity that begin | |||||||
on a fixed date and continue indefinitely. | |||||||
So, an investment pays $20 at the beginning of each month | |||||||
would be Annuity Due or Perpetuity. | |||||||
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