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Which of the following statements regarding annuities and perpetuities is correct assuming positive interest rates? The present value of a perpetuity cannot be computed whereas
Which of the following statements regarding annuities and perpetuities is correct assuming positive interest rates?
The present value of a perpetuity cannot be computed whereas its future value can be computed. | ||
An ordinary annuity is worth more than an annuity due, given equal annual cash flows for 10 years and the same annual interest rate. | ||
A perpetuity is worth more than an annuity, given equal annual cash flows and the same annual interest rate. | ||
Perpetuities are finite but annuities are not.
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