Chapter 4

Question 1

Consists of a series of equal payments made at equal intervals of time

Answer 1

Annuity

Question 2

It is one where the equal payments are made at the end of each payment period starting from the first period

Answer 2

Ordinary Annuity

Question 3

It is one where the payment of the first amount is deferred a certain number of periods after the first

Answer 3

Deferred Annuity

Question 4

It is one where the payments are made at the start of each period, beginning from the first period

Answer 4

Annuity due

Question 5

It is an annuity where the payment periods extend forever or in which the periodic payments continue indefinitely

Answer 5

Perpetuity

Question 6

The ____ of any structure or property is the sum of its first cost and the present worth of all costs for replacement, operation, and maintenance for a long time or forever

Answer 6

Capitalized cost

Question 7

As a natural extension and application of perpetuity, we have ______

Answer 7

Capitalized cost

Question 8

To mean a series of payments made at infinitely short intervals of time

Answer 8

Continuous flow of funds