Asked by Anonymous

Suggest if the company need to set aside the lump sum of money that will collect interest or company should purchase annuities. Support your suggestion with argument.



Answered by economyst
I'm having trouble coming up with a "common" circumstance example of why a firm would purchase an annuity. Annuities generally lose their liquidity. The most common reason why a firm would hold a pile of cash is to have cash reserves -- to pay for unexpected events.
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