Asked by Andreas Frånlund on May 12, 2024
Verified
Monthly payments equal to 100% of the income earned by a restaurant fits the definition of a perpetuity.
Perpetuity
A financial instrument that provides a stream of infinite cash flows or payments that continue indefinitely.
- Ascertain financial instruments or setups that align with the definition of a perpetuity.
Verified Answer
CP
Connie PinedaMay 14, 2024
Final Answer :
False
Explanation :
A perpetuity involves payments of a fixed amount made at regular intervals indefinitely, not payments that vary based on income.
Learning Objectives
- Ascertain financial instruments or setups that align with the definition of a perpetuity.