Reference no: EM131948480

1. Which of the following statement is correct?

a. An annuity due is best defined as a series of unequal payments occurring at unequal intervals for an unspecified number of periods at the beginning of each period.

b. Future cash outflows are less burdensome than present cash outflows of the same amount.

c. When the periodic payments are made at reqular intervals, we say that the cash flow streams are uneven.

d. A perpetuity is an annuity with a finite number of payments.

e. All the answers are incorrect.

2. Which of the following statement is incorrect?

a. With an amortized loan, the equal amounts is paid off that include only the simple interest on the principal.

b. When we consider the time value of money, a dollar received in the future is worth less than a dollar received today.

c. With an amortized loan, after the last payment is made, all the interest and principal on the loan have been paid.

d. A perpetuity is a series of equal payments at equal time intervals that will be received into infinity.

e. Most of the answers are correct.