The problem asks to identify the incorrect statement among four statements related to financial concepts: ordinary annuity, annuity due, and perpetuity.

1. Problem Description

The problem asks to identify the incorrect statement among four statements related to financial concepts: ordinary annuity, annuity due, and perpetuity.

2. Solution Steps

Let's analyze each statement:

A. "An ordinary annuity has payments at the end of each year." This is a correct definition of an ordinary annuity.

B. "An annuity due has payments at the beginning of each year." This is a correct definition of an annuity due.

C. "Perpetuity is considered a perpetual annuity." This is a correct definition of perpetuity.

D. "An ordinary annuity has a greater PV than an annuity due if they both have the same periodic payments, discount rate and time period." This is incorrect. An annuity due has payments at the beginning of each period, which means each payment occurs one period sooner than in an ordinary annuity. Therefore, with the same payment amount, discount rate, and time period, an annuity due will always have a higher present value than an ordinary annuity.

Therefore, the incorrect statement is D.

3. Final Answer

D. An ordinary annuity has a greater PV than an annuity due if they both have the same periodic payments, discount rate and time period