A perpetuity, a special form of annuity, pays cash flows

Question

Quizplus · Accepted Answer

A perpetuity is a special form of annuity that pays cash flows continuously forever, without any end date. It does have time value of money implications, as the value of the perpetuity depends on the interest rate. However, the cash flows are not affected by interest rate changes. Therefore, option A is incorrect. Option C is also incorrect, as perpetuity payments are continuous, not intermittent.

A Perpetuity, a Special Form of Annuity, Pays Cash Flows