Exam 5: The Time Value of Money
Exam 1: Introduction to Corporate Finance38 Questions
Exam 2: Accounting Statements and Cash Flow59 Questions
Exam 3: Financial Planning and Growth39 Questions
Exam 4: Financial Markets and Net Present Value: First Principles of Finance36 Questions
Exam 5: The Time Value of Money73 Questions
Exam 6: How to Value Bonds and Stocks81 Questions
Exam 7: Net Present Value and Other Investment Rules57 Questions
Exam 8: Net Present Value and Capital Budgeting48 Questions
Exam 9: Risk Analysis, Real Options, and Capital Budgeting35 Questions
Exam 10: Risk and Return: Lessons From Market History51 Questions
Exam 11: Risk and Return: the Capital Asset Pricing Model65 Questions
Exam 12: An Alternative View of Risk and Return: the Arbitrage Pricing Theory42 Questions
Exam 13: Risk, Return, and Capital Budgeting63 Questions
Exam 14: Corporate Financing Decisions and Efficient Capital Markets46 Questions
Exam 15: Long-Term Financing: an Introduction46 Questions
Exam 16: Capital Structure: Basic Concepts56 Questions
Exam 17: Capital Structure: Limits to the Use of Debt53 Questions
Exam 18: Valuation and Capital Budgeting for the Levered Firm54 Questions
Exam 19: Dividends and Other Payouts47 Questions
Exam 20: Issuing Equity Securities to the Public43 Questions
Exam 21: Long-Term Debt50 Questions
Exam 22: Leasing42 Questions
Exam 23: Options and Corporate Finance: Basic Concepts63 Questions
Exam 24: Options and Corporate Finance: Extensions and Applications24 Questions
Exam 25: Warrants and Convertibles47 Questions
Exam 26: Derivatives and Hedging Risk50 Questions
Exam 27: Short-Term Finance and Planning51 Questions
Exam 28: Cash Management35 Questions
Exam 29: Credit Management31 Questions
Exam 30: Mergers and Acquisitions55 Questions
Exam 31: Financial Distress22 Questions
Exam 32: International Corporate Finance54 Questions
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The great grandparents of one of your classmates sold their munitions factory to the government in beginning of 1898 during the Spanish-American War for $150,000. If these proceeds had been invested at 6% from then until the end of 2001, what would the legacy to your classmate's family be worth at the end of 2001 (assume whole years)?
(Multiple Choice)
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Beatrice invests $1,000 in an account that pays 4% simple interest. How much more could she have earned over a five-year period if the interest had compounded annually?
(Multiple Choice)
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There are three factors that affect the future value of an annuity. Explain what these three factors are and discuss how an increase in each will impact the future value of the annuity.
(Essay)
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The present value of future cash flows minus initial cost is called:
(Multiple Choice)
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Which one of the following statements concerning interest rates is correct?
(Multiple Choice)
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Mr. Miser, who is 35 years old, has just inherited $11,000 and decides to use the windfall towards his retirement. He places the money in a bank, which promises a return of 6% per year until his planned retirement at age 65. If his funds earn 6% interest compounded annually, how much will he have at retirement? Repeat the analysis for both semi-annual and continuous compounding.
(Essay)
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Luis has a management contract which grants him a lump sum payment of $20 million be paid upon the completion of his first five years of service. The company wants to set aside an equal amount of funds each year to cover this anticipated cash outflow. The company can earn 4.5 percent on these funds. How much must the company set aside each year for this purpose?
(Multiple Choice)
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You are to receive $75 per year indefinitely. The market rate of interest for these types of payments is 8%. The price you would pay for this stream is:
(Multiple Choice)
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Which of the following amounts is closest to the end value of investing $5,000 for 14 months at a stated annual interest rate of 6 percent compounded monthly?
(Multiple Choice)
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Which of the following amounts is closest to the end value of investing $7,500 for 2 1/2 years at an effective annual interest rate of 12.36%? Interest is compounded semiannually.
(Multiple Choice)
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Tobi owns a perpetuity that will pay $1,500 a year, starting one year from now. He offers to sell you all of the remaining payments after the next 25 payments have been paid. What price should you offer him for payments 26 onward if you desire a rate of return of 8 percent? What does your offer price illustrate about the value of perpetuities?
(Essay)
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