2. 3. 1. Assume two annuities have the same number or rents (payments), payin interest rate. One is an annuity due and one is an ordinary annuity. In this case the present value of the annuity due will be less than the present value of the ordinary annuity For receivables sold with recourse, the seller guarantees payment to the purchaser if the debtor fails to pay. Liquidity refers to the ability of an enterprise to pay its debts as they mature. Land held for speculation (resale) is reported in the property, plant, and equipment section of the balance sheet. 5. The time value of money refers to the fact that a dollar received today is worth more than a dollar received at some time in the future. Multiple Choice - On your answer sheet mark the correct answer for 15 of the 17 multiple choice questions. Mark all five letters on the answer sheet for the two questions you skip. Only the first 15 questions answered will be graded. (2 points each) 6. On December 1, 2021, Schwartz Company sold some machinery to Melton Company. The two companies entered into an installment sales contract at a predetermined interest rate. The contract required four equal annual payments with the first payment due on December 1, 2021, the date of the sale. What present value concept is appropriate for this situation? Future amount of an ordinary annuity of 1 for four periods b. Future amount of 1 for four periods Present value of an ordinary annuity of 1 for four periods d. Present value of an annuity due of 1 for four periods. On January 1, 2021 Cub Corporation decided to invest $25,000 every December 31st for the next six years (2021 2026). If Cub will earn 12% on the investment, what amoun will be in the investment fund on December 31, 2026? $102,785. b. $115,120 $202,880. d. $227,225. a. c. 7. a. c