Ibiza Corporation invested $20,000 for the last four years in an investment that will pay the firm $120,000 at the end of this year. The $120,000 received at the end of this year is an example of a(n) _____.

Question

Quizplus · Accepted Answer

The $120,000 received at the end of this year after investing $20,000 for four years is a one-time or lump-sum amount. It is not an annuity, as annuities provide regular periodic payments over a specified period of time. It is also not an uneven cash flow, as there is only one cash flow occurring at the end of the investment period.

Ibiza Corporation Invested $20,000 for the Last Four Years in an Investment