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Identify whether the situations described below are example of uneven cash flows or annuity payments.

a. You recently moved to a new apartment and signed a contract to pay monthly rent to your landlord for a year.
b. SOE Corp. hires an average of 10 people every year and matches the contribution of each employee toward his or her retirement fund.
c. Franklinia Venture Capital (FVC) invested in a budding entrepreneur’s restaurant. The restaurant owner promises to pay FVC 10% of the profit each month for the next 10 years.
d. You have committed to deposit $600 in a fixed interest–bearing account every quarter for four years.

Respuesta :

Solution :

The Uneven cash flow is defined as the series of unequal payments which is done over a period of time. Whereas if a regular amount is to be made in a fixed period of time, that such payments are known as equal cash flows.

An annuity payments refers to the payment that is made at equal interval of times. It pays a fixed amount of payments for an individual.

In the given situations,

a). Monthly rents payment is annuity payments.

b). Uneven cash flow

c). Uneven cash flow

d). Annuity

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