c. To accomodate unforeseen changes that might occur d. Because ultimately it is

Question

c. To accomodate unforeseen changes that might occur d. Because ultimately it is the change in a firm's overall future cash flows that matter. e e. Whenever sunk costs are involved QUESTION 31 3 points Save Answer Ted purchased an annuity today that will pay $1000 a month for five years. He received his first monthly payment today Allison purchased an annuity that will pay $1000 a month for five years. She will receive her first monthly payment one month from today Which of the following statements is correct concerning these two annuities. e a Both annuities have equal value today b. Allison's annuity is an annuity due. c. Ted's annuity has a higher present value than Allison's e d Allison's annuity has a higher present value than Ted's o e. Ted's annuity is an ordinary annuity QUESTION 32 3 points Save Answer Kathy's Kabinets is looking at a proiect that will equie s120 00 in fixed assets and another $20.000 in net

Explanation / Answer

Time Value of the money: Time is the value of the money what amount is recived today have more value if the same is receivd after one month. This is because the interest rate carrying the money between the month. So Ted's annuity recived today have the heigher value becuase it will get interest for the whole month and other Allison's annuity is recieved after the one month carrying nno interest for the one month.

As per the above,

Answer = Option C = Ted's Annuity has a heigher present value then Allisons

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