Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781260159516
Author: PHILLIPS
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter C, Problem 8MC
Which of the following statements is true?
- a. When the interest rate increases, the present value of a single amount decreases.
- b. When the number of interest periods increases, the present value of a single amount increases.
- c. When the interest rate increases, the present value of an annuity increases.
- d. None of the above are true.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
How would an increase in the interest rate effect the present value of an annuity problem (all other variables remain the same)
The Present Value of an Ordinary Annuity is identical to the Present Value of an Annuity Due. This statement is :
a
Indeterminate.
b
True.
c
False.
d
None of the abov
In which of the following tables would all present value factors be less than or
equal to one?
O Present value of an ordinary annuity.
O Future value of a lump sum amount.
O Present value of a lump sum amount.
O Future value of an ordinary annuity.
O None of these.
Chapter C Solutions
Fundamentals Of Financial Accounting
Ch. C - Prob. 1QCh. C - Prob. 2QCh. C - Which of the following is most likely to be an...Ch. C - Prob. 4QCh. C - Prob. 5QCh. C - Prob. 6QCh. C - Prob. 7QCh. C - You are saving up for a Mercedes-Benz SLR McLaren,...Ch. C - Prob. 2MCCh. C - Prob. 3MC
Ch. C - Prob. 4MCCh. C - Prob. 5MCCh. C - Assume you bought a car using a loan that requires...Ch. C - Assume you bought a car using a loan that requires...Ch. C - Which of the following statements is true? a. When...Ch. C - Prob. 9MCCh. C - Prob. 10MCCh. C - Prob. 1MECh. C - Prob. 2MECh. C - Prob. 3MECh. C - Prob. 4MECh. C - Prob. 5MECh. C - Prob. 6MECh. C - Prob. 7MECh. C - Prob. 8MECh. C - Prob. 9MECh. C - Prob. 10MECh. C - Prob. 11MECh. C - Prob. 12MECh. C - Prob. 1ECh. C - Prob. 2ECh. C - Prob. 3ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Computing Bond Issue Proceeds and Issue Price Your...Ch. C - Computing Missing Present or Future Values...Ch. C - Prob. 1CPCh. C - Prob. 2CPCh. C - Prob. 3CPCh. C - Prob. 4CPCh. C - Prob. 1PACh. C - Recording Equipment Purchase with Two-Year Note...Ch. C - Prob. 3PACh. C - Prob. 4PACh. C - Prob. 1PBCh. C - Recording Equipment Purchase with Two-Year Note...Ch. C - Prob. 3PBCh. C - Prob. 4PB
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- In comparing an ordinary annuity and an annuity due, which of the following is true? a. The future value of an annuity due is always less than the future value of an otherwise identical ordinary annuity, since one less payment is received with an annuity due. b. The future value of an annuity due is always greater than the future value of an otherwise identical ordinary annuity. c. The future value of an ordinary annuity is always greater than the future value of an otherwise identical annuity due.arrow_forwardIn the present value of an annuity table, the factors increase as the periods decrease. increase as the interest rates increase. decrease as the interest rates increase. decrease as the periods increase.arrow_forwardThe future value of a single sum A. is generally larger than the present sum. B. decreases as the number of periods increases. C. does not depend upon the number of periods. D. decreases as the interest rate increases.arrow_forward
- The Present or Future value of an Annuity Due is always lower than that of ordinary annuity. True B) False Jyarrow_forwardHow would an increase in the interest rate or a decrease in the number of periods until the payment is received affect the present value (PV) of a sum of money? Please explain properly. Thank you!arrow_forwardAll else being equal, if an annuity's cash flows increase, the present value of the annuity increases. True Falsearrow_forward
- The future value of an ordinary annuity for any given interest rate and number of periods is always less than the future value of an annuity due for the same interest rate and number of periods. True or False?arrow_forwardThe procedure of compounding that increases without bound is called a contingent annuity. TRUE O FALSEarrow_forwardWhy does an annuity due have a higher present value than a similar ordinaryannuity?arrow_forward
- Illustrate with examples , that Interest rate is equivalent to the savings rate from the deposits?arrow_forwardWhich of the following is true about perpetuities? O All else equal, the present value of a perpetuity is higher when the interest rate is lower. O All of those three statements are true. O If two perpetuities have the same present value and the same interest rate, they must have the same cash flows. O All else equal, the present value of a perpetuity is higher when the periodic cash flow is higher.arrow_forwardFor any investment, which will always have the higher future value : an ordinary annuity or an annuity due? For any debt, which will always have a higher future value: an ordinary annuity or an annuity due?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
What is an Annuity? Are Annuities a Good Investment? Basics of an Annuity, a Whiteboard Animation; Author: Learn to invest;https://www.youtube.com/watch?v=Wq7nq8Gx78w;License: Standard YouTube License, CC-BY