(Introduction to Finance)
1 . You may have just determined the present value of the anticipated cash flows of a potential investment. Management thinks your figures are very low. Which will of the subsequent actions could increase the present value of the cash moves?
a. presume a longer stream of cash runs of the same sum
b. increase the discount rate
c. decrease the discount price
d. a and c
2 . Your bank stability is exactly $12, 000. Three years ago you deposited $7, 938 and have not carressed the accounts since. What annually compounded rate of interest provides the bank recently been paying?
a. 8. 65%
b. 21. 00%
c. 8. 00%
d. six. 87%
three or more. A project provides a life of ten years beginning today. What is the present value today of a $1, 000 annuity that commences at the end in the third yr and proceeds until the end of the 10th year, given a 12% discount charge.
a. $4, 811
n. $3, 248
c. $4, 734
m. $5, 600
e. $3, 960
some. Which with the following assertions is most appropriate?
a. A great investment which substances interest semiannually, and includes a nominal charge of 10 percent, will have a powerful rate lower than 10 percent. b. The present worth of a three-year $100 premium due is less than the present worth of a three-year $100 common annuity.
c. The proportion of the repayment of a completely amortized mortgage which will go toward fascination declines over time.
d. Claims a and c happen to be correct.
elizabeth. None with the answers above is correct.
your five. If you put in $3, 000 in your bank account at the beginning of each one of the next five years (t = 0, t = 1, t = a couple of, t sama dengan 3 and t = 4). You estimate that you could earn on the lookout for percent a year on your investments. How much can you have inside your account four years from now (at t sama dengan 4)? (Assume that no money is withdrawn from the accounts until
big t = four. )
a. $13, 719. 39
n. $17, 954. 13
c. $19, 570. 00
g. $21, 430. 45
elizabeth. $22, 436. 12
1 . Exeter Inc. has $75, 000 committed to securities that earn a return of 16% compounded quarterly. The company can be developing a new product...