\[\begin{array} { | l | l | l | l | l | l | } \hline \begin{array} { l } \text { Date } \\ \text { (years) } \end{array} & 0 & 1 & 2 & 3 & 4 \\ \hline \begin{array} { l } \text { Cash } \\ \text { Flows } \end{array} & - \$ 3500 & \$ 1000 & \$ 1000 & \$ 1000 & \$ 1000 \\ \hline \end{array}\]

A) Karen, who loans a friend $3500, and whose friend pays back the loan in four annual installments of $1000 B) Leo, who borrows $3500, and then pays back the loan in four annual payments of $1000 C) Joe, who puts down $3500 to buy a car, and then makes annual payments of $1000 D) Harry, who borrows $3500, and then receives an annual payment of $1000 A) Karen, who loans a friend $3500, and whose friend pays back the loan in four annual installments of $1000 B) Leo, who borrows $3500, and then pays back the loan in four annual payments of $1000 C) Joe, who puts down $3500 to buy a car, and then makes annual payments of $1000 D) Harry, who borrows $3500, and then receives an annual payment of $1000

\[\begin{array} { | l | l | l | l | l | l | l | } \hline \begin{array} { l } \text { Date } \\ \text { (Months) } \end{array} & 0 & 1 & 2 & 3 & 4 & 5 \\ \hline \begin{array} { l } \text { Cash } \\ \text { Flows } \end{array} & - \$ 250 & - \$ 250 & - \$ 250 & - \$ 250 & - \$ 250 & - \$ 250 \\ \hline \end{array}\]

A) You receive payments of $250 per month for five months. B) You make payments of $250 per month for five months. C) You receive payments of $250 per month for six months. D) You make payments of $250 per month for six months. A) You receive payments of $250 per month for five months. B) You make payments of $250 per month for five months. C) You receive payments of $250 per month for six months. D) You make payments of $250 per month for six months.

Exam 3: Time Value of Money: an Introduction

A backhoe can dig 150 feet of trench per hour and costs $500 per hour to hire and operate. A ditch digger can dig six feet of trench per hour. Based on this information, what is the most a ditch digger can charge per hour when digging ditches?

(Multiple Choice)

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Question 61

A wholesale food retailer is offered $14 per carton for 5000 cartons of peaches. The wholesaler can buy peaches from their growers at $12.50 per carton. Shipping costs $1.50 per carton, for the first 1000 cartons, and $1.00 per carton for every carton over that. Will taking this opportunity increase the value of the wholesale food retailer?

(Multiple Choice)

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Question 62

What is one of the main obstacles in cost-benefit analysis?

(Essay)

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Question 63

Jeff has the opportunity to receive lump-sum payments either now or in the future. Which of the following opportunities is the best, given that the interest rate is 7% per year?

(Multiple Choice)

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Question 64

Use the table for the question(s) below. Consider the following prices from a McDonald's Restaurant: Big Mac \ 2.99 Large Coke \ 1.39 Large Fries \ 1.09 -A McDonald's Big Mac value meal consists of a Big Mac, a large Coke, and a large fries. Assume that there is a competitive market for McDonald's food items and that McDonald's sells the Big Mac value meal for $4.79. Does an arbitrage opportunity exists and if so how would you exploit it and how much would you make on one value meal?

(Multiple Choice)

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Question 65

An investment will pay you $100 in one year and $200 in two years. If the interest rate is 5%, what is the present value of these cash flows?

(Multiple Choice)

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Question 66

Diwali Airlines has a contract that gives it the opportunity to purchase up to 10,000,000 gallons of jet fuel at $2.00 per gallon. The current market price of jet fuel is $2.26 per gallon. Diwali believes it will only need 6,000,000 gallons of jet fuel. What is the value of this opportunity?

(Multiple Choice)

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Question 67

Consider the following timeline: If the current market rate of interest is 12%, then the value of the cash flows in year 0 and year 2 as of year 1 is closest to:

(Multiple Choice)

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Question 68

Stella deposits $5,000 in a savings account at a bank that offers interest of 5.5% on such accounts. What is the value of the money in her savings account in one year's time?

(Multiple Choice)

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Question 69

Date (years) 0 1 2 3 4 Cash Flows -\ 3500 \ 1000 \ 1000 \ 1000 \ 1000

(Multiple Choice)

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Question 70

Which of the following statements is FALSE?

(Multiple Choice)

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Question 71

A firm that provides tax services to the public intends to offer a premium tax-return service at a higher price than their current services. The managers of the company ask experts in marketing to determine how much an effective ad campaign for such a service would cost, and by how much sales would be increased. They consult experts in economics to calculate the increases in revenue from the success of the campaign, experts in operations to determine the cost of offering the service, and experts in strategy to anticipate possible countermoves by competitors. This example illustrates which of the following points about the role of financial managers?

(Multiple Choice)

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Question 72

Date (Months) 0 1 2 3 4 5 Cash Flows -\ 250 -\ 250 -\ 250 -\ 250 -\ 250 -\ 250

(Multiple Choice)

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Question 73

Which of the following best explains why you cannot use the price of rolled oats at a local supermarket as the competitive market value of rolled oats?

(Multiple Choice)

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Question 74

Which of the following is the overarching principal that a financial manager should follow when making decisions?

(Multiple Choice)

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Question 75

A company decides to close down its plastics division. It has on hand 20 tonnes of styrene monomer, a raw material that has a market price of $700 per tonne, which had been originally purchased at $650 per tonne. Given that the company has no use for the styrene monomer, and that it would cost the company $5000 to store it, what is the value of the 20 tonnes of styrene monomer to the company?

(Multiple Choice)

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Question 76

You own 1000 shares of Newstar Financial stock, currently trading for $57 per share. You are offered a deal where you can exchange these stocks for 900 shares of Ausback Financial Group stock, currently trading at $63 per share. What is the value of this trade, if you choose to make it?

(Multiple Choice)

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Question 77

In order to distinguish between inflows and outflows, different colors are assigned to each of these cash flows when constructing a timeline.

(True/False)

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Question 78

Like other metals, uranium 308 is traded in competitive markets. Which of the following would most likely value a given weight of uranium 308 the most?

(Multiple Choice)

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Question 79

Which of the following statements regarding arbitrage and security prices is INCORRECT?

(Multiple Choice)

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Question 80

Showing 61 - 80 of 89

A backhoe can dig 150 feet of trench per hour and costs $500 per hour to hire and operate. A ditch digger can dig six feet of trench per hour. Based on this information, what is the most a ditch digger can charge per hour when digging ditches?

What is one of the main obstacles in cost-benefit analysis?

Jeff has the opportunity to receive lump-sum payments either now or in the future. Which of the following opportunities is the best, given that the interest rate is 7% per year?

An investment will pay you $100 in one year and $200 in two years. If the interest rate is 5%, what is the present value of these cash flows?

Diwali Airlines has a contract that gives it the opportunity to purchase up to 10,000,000 gallons of jet fuel at $2.00 per gallon. The current market price of jet fuel is $2.26 per gallon. Diwali believes it will only need 6,000,000 gallons of jet fuel. What is the value of this opportunity?

Consider the following timeline: If the current market rate of interest is 12%, then the value of the cash flows in year 0 and year 2 as of year 1 is closest to:

Stella deposits $5,000 in a savings account at a bank that offers interest of 5.5% on such accounts. What is the value of the money in her savings account in one year's time?

Date (years) 0 1 2 3 4 Cash Flows -\ 3500 \ 1000 \ 1000 \ 1000 \ 1000

Which of the following statements is FALSE?

Date (Months) 0 1 2 3 4 5 Cash Flows -\ 250 -\ 250 -\ 250 -\ 250 -\ 250 -\ 250

Which of the following best explains why you cannot use the price of rolled oats at a local supermarket as the competitive market value of rolled oats?

Which of the following is the overarching principal that a financial manager should follow when making decisions?

You own 1000 shares of Newstar Financial stock, currently trading for $57 per share. You are offered a deal where you can exchange these stocks for 900 shares of Ausback Financial Group stock, currently trading at $63 per share. What is the value of this trade, if you choose to make it?

In order to distinguish between inflows and outflows, different colors are assigned to each of these cash flows when constructing a timeline.

Like other metals, uranium 308 is traded in competitive markets. Which of the following would most likely value a given weight of uranium 308 the most?

Which of the following statements regarding arbitrage and security prices is INCORRECT?

Corporate Finance and the Financial Manager

Introduction to Financial Statement Analysis

Time Value of Money: Valuing Cash Flow Streams

Interest Rates

Bond Valuation

Share Valuation: the Dividend-Discount Model

Investment Decision Rules

Fundamentals of Capital Budgeting

Share Valuation: a Second Look

Risk and Return in Capital Markets

Systematic Risk and the Equity Risk Premium

The Cost of Capital

Raising Capital

Debt Financing

Capital Structure

Payout Policy

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