An annuity is ________.
A) a noncash expense
B) a series of equal cash flows at equal time intervals
C) an investment product whose funds are invested in the stock market
D) a rate at which an investment's present value of all expected cash inflows equals the present value of project's expected cash outflows.

Question

Quizplus · Accepted Answer

An annuity is a financial product that refers to a series of equal cash flows at equal time intervals. It can be used as an investment tool where an individual pays a lump sum upfront and receives a fixed amount of money or income periodically for a specific time period, such as monthly or annually. An annuity can also be used as a retirement savings vehicle. It is not a noncash expense or an investment product invested in the stock market, nor is it a rate used in investment analysis.

An Annuity Is ________