Question 1

Bruce Derr invested $25,000 in an account which pays interest at a rate of 7% that is compounded monthly.At the end of 4 years how much will Bruce have?

Accepted Answer

A) $26,796.47 
B) $33,051.35 
C) $26,015.10 
D) $32,998.23 
A) $26,796.47 
B) $33,051.35 
C) $26,015.10 
D) $32,998.23

Question 2

A measure of the performance of investments on a common-size basis which eliminates the distortion caused by the size of the initial investment is referred to as:

Accepted Answer

A) rate of return 
B) risk premium ratio 
C) return of capital 
D) rate of inflation 
A) rate of return 
B) risk premium ratio 
C) return of capital 
D) rate of inflation

Question 3

The future value of a $7,000 investment at the end of 4 years with an interest rate of 6% compounded annually is:

Accepted Answer

A) $8,680.00 
B) $8,837.50 
C) $5,544.70 
D) $8,867.60 
A) $8,680.00 
B) $8,837.50 
C) $5,544.70 
D) $8,867.60

Question 4

All of the following are primary risk factors that generate risk premiums except:

Accepted Answer

A) inflation risk 
B) business risk 
C) relative risk 
D) liquidity risk 
A) inflation risk 
B) business risk 
C) relative risk 
D) liquidity risk

Question 5

Midwest,Inc.has just borrowed $100,000 to purchase a new piece of equipment.The contract calls for 10 semiannual payments of $12,637.88,beginning six months from today.The annual interest rate Southland is paying equals:

Accepted Answer

A) 9% 
B) 12% 
C) 10% 
D) cannot be determined from the information given 
A) 9% 
B) 12% 
C) 10% 
D) cannot be determined from the information given

Question 6

The future value of a $20,000 investment at the end of 7 years,assuming 9% simple interest,is:

Accepted Answer

A) $ 36,560.00 
B) $ 32,600.00 
C) $ 10,940.00 
D) $184,008.00 
A) $ 36,560.00 
B) $ 32,600.00 
C) $ 10,940.00 
D) $184,008.00

Question 7

Match between columns
                        Premises: The chance of a decline in the purchasing power of the monetary unit during the time money is invested.
Exposure to the chance that an unfavorable outcome will occur at some future point in time.
The chance that an investment can not be quickly converted to cash.
A rate of return generated by an investment when there is virtually no chance that the return will not be generated.
An increase in the rate of return expected by an investor for assuming greater investment risk.
A summary measure of an investment's performance, stated as a percentage, based on the possible rates of return and on the likelihood of those rates of return occurring.
A measure of an investment's performance on a common size basis.
Return of the amount initially invested.
Money received in excess of an initial investment.
The risk that a business will not continue to operate.

Accepted Answer

The Answer of Inflation risk and Risk-free rate of return is...

Question 8

Wildcat Enterprises is considering two projects that will required the investment of $100,000.Using the expected rate of return for each project,indicate which of the two you would recommend.Justify your choice.
Project A
   Project B

Accepted Answer

Rates of return
7,000/100,000 = .07 or 7

Bruce Derr invested $25,000 in an account which pays interest at a rate of 7% that is compounded monthly.At the end of 4 years how much will Bruce have?

A measure of the performance of investments on a common-size basis which eliminates the distortion caused by the size of the initial investment is referred to as:

The future value of a $7,000 investment at the end of 4 years with an interest rate of 6% compounded annually is:

All of the following are primary risk factors that generate risk premiums except:

Midwest,Inc.has just borrowed $100,000 to purchase a new piece of equipment.The contract calls for 10 semiannual payments of $12,637.88,beginning six months from today.The annual interest rate Southland is paying equals:

The future value of a $20,000 investment at the end of 7 years,assuming 9% simple interest,is:

Wildcat Enterprises is considering two projects that will required the investment of $100,000.Using the expected rate of return for each project,indicate which of the two you would recommend.Justify your choice. Project A Project B

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Planning Investments: Capital Budgeting

Planning Equity Financing

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Cash Flows

Company Performance: Comprehensive Evaluation

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Exam 11: Time Value of Money

Bruce Derr invested $25,000 in an account which pays interest at a rate of 7% that is compounded monthly.At the end of 4 years how much will Bruce have?

A measure of the performance of investments on a common-size basis which eliminates the distortion caused by the size of the initial investment is referred to as:

The future value of a $7,000 investment at the end of 4 years with an interest rate of 6% compounded annually is:

All of the following are primary risk factors that generate risk premiums except:

Midwest,Inc.has just borrowed $100,000 to purchase a new piece of equipment.The contract calls for 10 semiannual payments of $12,637.88,beginning six months from today.The annual interest rate Southland is paying equals:

The future value of a $20,000 investment at the end of 7 years,assuming 9% simple interest,is:

Wildcat Enterprises is considering two projects that will required the investment of $100,000.Using the expected rate of return for each project,indicate which of the two you would recommend.Justify your choice. Project A Project B

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Planning Investments: Capital Budgeting

Planning Equity Financing

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Cash Flows

Company Performance: Comprehensive Evaluation

Filters