What term refers to a stream of cash flows that continues indefinitely without a defined end?

The term that refers to a stream of cash flows that continues indefinitely without a defined end is perpetuity. This concept is fundamental in finance and economics, as it represents a series of equal cash payments received at regular intervals for an infinite duration.

Perpetuities are particularly useful in valuing certain types of investments, such as stocks or bonds that pay dividends or interest indefinitely. The valuation of a perpetuity can be computed using a straightforward formula that calculates the present value of these endless cash flows, assuming a constant rate of return.

In contrast to other options, an annuity due and an ordinary annuity have defined periods for their cash flows. An annuity due involves payments made at the beginning of each period, while an ordinary annuity entails payments made at the end of each period. Future value, on the other hand, refers to the value of an investment at a specific point in the future after interest or growth has been applied, and does not relate to a stream of payments over an indefinite period. Thus, perpetuity stands out as the correct term for an indefinite stream of cash flows.