Ask Question
BusinessBusiness
15 May, 23:53

The Jones Brothers recently established a trust fund that will provide annual scholarships of $12,000 indefinitely. These annual scholarships are: an ordinary annuity. an annuity due. amortized payments. a perpetuity. a perpetuity due.

+5
Answers (1)
  1. 16 May, 00:29
    0
    D. Perpetuity

    Explanation:

    Perpetuity is a type of annuity that has no end date. It is a fixed some of money paid every year to someone or for a purpose (in this case, scholarship) indefinitely. It is a form of annuity that lasts for ever.

    The stream of cash flow continues indefinitely. It is usually calculated by dividing Cash flow by discount rate. That is

    PV of Perpetuity = D/r

    Where

    D = Dividend

    r = interest rate, and

    PV = present value.

    The major characteristics of perpetuity is that it doesn't have a fixed time span and continues indefinitely.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “The Jones Brothers recently established a trust fund that will provide annual scholarships of $12,000 indefinitely. These annual ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
5ms noncallable bonds currently sell for $1,120. they have a 15 year maturity, an annual coupon of $85, an a par value of $1000. what is their yield-to-maturity
Answers (1)
Barron Industries has the following information: Sales Revenue $ 645,000 Ending inventory 69,000 Cost of Goods Sold 490,000 Beginning inventory 59,000 What is Barron's number of days to sell? (Round intermediate calculations to 2 decimal places.
Answers (1)
Abby received requests from three families to babysit a toddler for four hours on friday night. she can only babysit for one of the three families.
Answers (1)
All of the following are deductible as medical expenses except: A) payments for a vision exam and contact lenses. B) payments to a hospital for Laboratory fees and X-rays for diagnosis of a medical problem.
Answers (1)
If Carol's disposable income increases from $1,200 to $1,700 and her savings increases from $200 to $300, then: marginal propensity to save is three-fifths. marginal propensity to consume is one-half. marginal propensity to consume is four-fifths.
Answers (1)
New Questions in Business
Suppose that the equilibrium price of greeting cards declined at the same time the equilibrium quantity of greeting cards increased. Which one of the following would most likely be responsible? a.
Answers (1)
You plan to borrow $ 2 comma 000 from a bank. In exchange for $ 2 comma 000 today, you promise to pay $ 2 comma 100 in one year. What does the cash flow timeline look like from your perspective? What does it look like from the bank's perspective?
Answers (1)
Which of the following is indicative of a short-term restrictive financial policy? a) purchasing inventory only as needed b) granting credit to more customers c) increased investment in marketable securities d) maintaining a large accounts
Answers (2)
You are employed as an administrative staff member of a community healthcare office that just opened last month. you and your manager are working hard to advertise and expand the customer base.
Answers (1)
The following costs result from the production and sale of 4,450 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $295 each. The company has a 30% income tax rate.
Answers (1)
Home » Business » The Jones Brothers recently established a trust fund that will provide annual scholarships of $12,000 indefinitely. These annual scholarships are: an ordinary annuity. an annuity due. amortized payments. a perpetuity. a perpetuity due.
Sign Up Forgot Password?