Exam 4: The Time Value of Money Part 2

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Present values and interest rates are inversely related.This means that if you deposit $1,000 into an interest-earning account today,it will take longer to reach a future value of $5,000 at an interest rate of 6% than at a rate of 4%.

(True/False)

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Question 121

The formula for the Present Value Interest Factor of an Annuity (PVIFA)is $\frac { ( 1 + r ) ^ { n } - 1 } { r }$ .

(True/False)

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Question 122

Which is greater,the present value of a $1,000 five-year ordinary annuity discounted at 10%,or the present value of a $1,000 five-year annuity due discounted at 10%?

(Multiple Choice)

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Question 123

If you borrow $5,000 at an annual interest rate of 9.0% for six years,what will your repayment(s)be if this is an interest-only loan?

(Essay)

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Question 124

Given a positive interest rate and a positive cash flow,an ordinary annuity always has a greater future value than an annuity due of the same size and number of cash flows.

(True/False)

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Question 125

You have the opportunity to purchase mineral rights to a property in Wyoming with expected annual cash flows of $8,000 per year for ten years.If you discount these cash flows at a rate of 12% per year,what are these cash flows worth today if the cash flows occur at the end of each period?

(Multiple Choice)

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Question 126

Showing 121 - 126 of 126

Present values and interest rates are inversely related.This means that if you deposit $1,000 into an interest-earning account today,it will take longer to reach a future value of $5,000 at an interest rate of 6% than at a rate of 4%.

The formula for the Present Value Interest Factor of an Annuity (PVIFA)is $\frac { ( 1 + r ) ^ { n } - 1 } { r }$ .

Which is greater,the present value of a $1,000 five-year ordinary annuity discounted at 10%,or the present value of a $1,000 five-year annuity due discounted at 10%?

If you borrow $5,000 at an annual interest rate of 9.0% for six years,what will your repayment(s)be if this is an interest-only loan?

Given a positive interest rate and a positive cash flow,an ordinary annuity always has a greater future value than an annuity due of the same size and number of cash flows.

You have the opportunity to purchase mineral rights to a property in Wyoming with expected annual cash flows of $8,000 per year for ten years.If you discount these cash flows at a rate of 12% per year,what are these cash flows worth today if the cash flows occur at the end of each period?

Financial Management

Financial Statements

The Time Value of Money Part 1

Interest Rates

Bonds and Bond Valuation

Stocks and Stock Valuation

Risk and Return

Capital Budgeting Decision Models

Cash Flow Estimation

The Cost of Capital

Forecasting and Short-Term Financial Planning

Working Capital Management

Financial Ratios and Firm Performance

Raising Capital

Capital Structure

Dividends, Dividend Policy, and Stock Splits

International Financial Management

Filters

Exam 4: The Time Value of Money Part 2

Present values and interest rates are inversely related.This means that if you deposit $1,000 into an interest-earning account today,it will take longer to reach a future value of $5,000 at an interest rate of 6% than at a rate of 4%.

The formula for the Present Value Interest Factor of an Annuity (PVIFA)is (1+r)n−1r\frac { ( 1 + r ) ^ { n } - 1 } { r }r(1+r)n−1​ .

Which is greater,the present value of a $1,000 five-year ordinary annuity discounted at 10%,or the present value of a $1,000 five-year annuity due discounted at 10%?

If you borrow $5,000 at an annual interest rate of 9.0% for six years,what will your repayment(s)be if this is an interest-only loan?

Given a positive interest rate and a positive cash flow,an ordinary annuity always has a greater future value than an annuity due of the same size and number of cash flows.

You have the opportunity to purchase mineral rights to a property in Wyoming with expected annual cash flows of $8,000 per year for ten years.If you discount these cash flows at a rate of 12% per year,what are these cash flows worth today if the cash flows occur at the end of each period?

Financial Management

Financial Statements

The Time Value of Money Part 1

Interest Rates

Bonds and Bond Valuation

Stocks and Stock Valuation

Risk and Return

Capital Budgeting Decision Models

Cash Flow Estimation

The Cost of Capital

Forecasting and Short-Term Financial Planning

Working Capital Management

Financial Ratios and Firm Performance

Raising Capital

Capital Structure

Dividends, Dividend Policy, and Stock Splits

International Financial Management

Filters

The formula for the Present Value Interest Factor of an Annuity (PVIFA)is $\frac { ( 1 + r ) ^ { n } - 1 } { r }$ .