Answered: The Present Worth of an Annuity is…

The Present Worth of an Annuity is period(s) to the of the first Annuity cash flow arrow a) one, right b) one, left c) two, right d) two, left

Fundamentals Of Construction Estimating

4th Edition

ISBN:9781337399395

Author:Pratt, David J.

Publisher:Pratt, David J.

Chapter9: Pricing Construction Equipment

Section: Chapter Questions

Problem 5RQ

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Question

The Present Worth of an Annuity is
period(s) to the
of the first Annuity cash flow arrow
a) one, right
b) one, left
c) two, right
d) two, left

Expert Solution

Step 1

The present worth of annuity is the present value of the sum which is needed today for future annuity payments. On cash flow diagram this value comes to the left of the first annuity cash flow arrow.

Step 2

The cash flow diagram is shown below:

The present worth of annuity is one period to the left of the first annuity cash flow arrow.

Step by step

Solved in 3 steps with 1 images

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