Multiple choice

Directions: State whether the following statement is True Or False.

It is easier to calculate the present value of uneven cash flows than calculating present value of annuity over n years.

  1. True

  2. False
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B Correct answer
Explanation

Annuities have a fixed payment and a standard formula, making them easier to calculate. Uneven cash flows require calculating the present value of each individual cash flow separately and summing them, which is more complex.

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