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If you are doing PVA and FVA problems, what difference does it make if the annuities are "ordinary annuities" or "annuities due"?
In PVA or a FVA of annuity due trouble, annuity expenditure earning interest one period sooner than in ordinary annuity trouble thus, higher PVA and FVA values result with an annuity due. The first payment takes place sooner in the case of a future value of an annuity due. In current value of annuity due problems, each annuity payment takes place one period sooner, so the payments are discounted fewer severely.
Peak Inc. needs to order Canadian raw materials to use in its production process. The Canadian exporter typically invoices Peak in Canadian dollars. Assume that the current exchang
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