Question 1

Which one of the following will produce the highest present value interest factor?

Accepted Answer

A) 6 percent interest for five years 
B) 6 percent interest for eight years 
C) 6 percent interest for ten years 
D) 8 percent interest for five years 
E) 8 percent interest for ten years 
A) 6 percent interest for five years 
B) 6 percent interest for eight years 
C) 6 percent interest for ten years 
D) 8 percent interest for five years 
E) 8 percent interest for ten years

Question 2

Terry is calculating the present value of a bonus he will receive next year.The process he is using is called:

Accepted Answer

A) growth analysis. 
B) discounting. 
C) accumulating. 
D) compounding. 
E) reducing. 
A) growth analysis. 
B) discounting. 
C) accumulating. 
D) compounding. 
E) reducing.

Question 3

At 8 percent interest,how long would it take to quadruple your money?

Accepted Answer

A) 16.55 years 
B) 16.64 years 
C) 17.09 years 
D) 18.01 years 
E) 18.56 years 
A) 16.55 years 
B) 16.64 years 
C) 17.09 years 
D) 18.01 years 
E) 18.56 years

Question 4

Gerold invested $5,600 in an account that pays 5 percent simple interest.How much money will he have at the end of ten years?

Accepted Answer

A) $7,710 
B) $8,000 
C) $8,400 
D) $8,678 
E) $9,099 
A) $7,710 
B) $8,000 
C) $8,400 
D) $8,678 
E) $9,099

Question 5

A year ago,you deposited $40,000 into a retirement savings account at a fixed rate of 5.5 percent.Today,you could earn a fixed rate of 6.5 percent on a similar type account.However,your rate is fixed and cannot be adjusted.How much less could you have deposited last year if you could have earned a fixed rate of 6.5 percent and still have the same amount as you currently will when you retire 38 years from today?

Accepted Answer

A) $10,118.42 less 
B) $10,333.33 less 
C) $11,417.09 less 
D) $12,274.12 less 
E) $12,313.30 less 
A) $10,118.42 less 
B) $10,333.33 less 
C) $11,417.09 less 
D) $12,274.12 less 
E) $12,313.30 less

Question 6

You are scheduled to receive $30,000 in two years.When you receive it,you will invest it for 5 more years,at 6 percent per year.How much money will you have 7 years from now?

Accepted Answer

A) $38,909.19 
B) $39,381.16 
C) $40,146.77 
D) $47,209.19 
E) $51,414.73 
A) $38,909.19 
B) $39,381.16 
C) $40,146.77 
D) $47,209.19 
E) $51,414.73

Question 7

Your father invested a lump sum 26 years ago at 4.25 percent interest.Today,he gave you the proceeds of that investment which totaled $51,480.79.How much did your father originally invest?

Accepted Answer

A) $15,929.47 
B) $16,500.00 
C) $17,444.86 
D) $17,500.00 
E) $17,999.45 
A) $15,929.47 
B) $16,500.00 
C) $17,444.86 
D) $17,500.00 
E) $17,999.45

Question 8

Travis invested $9,250 in an account that pays 6 percent simple interest.How much more could he have earned over a 7-year period if the interest had compounded annually?

Accepted Answer

A) $741.41 
B) $773.58 
C) $802.16 
D) $833.33 
E) $858.09 
A) $741.41 
B) $773.58 
C) $802.16 
D) $833.33 
E) $858.09

Which one of the following will produce the highest present value interest factor?

Terry is calculating the present value of a bonus he will receive next year.The process he is using is called:

At 8 percent interest,how long would it take to quadruple your money?

Gerold invested $5,600 in an account that pays 5 percent simple interest.How much money will he have at the end of ten years?

You are scheduled to receive $30,000 in two years.When you receive it,you will invest it for 5 more years,at 6 percent per year.How much money will you have 7 years from now?

Your father invested a lump sum 26 years ago at 4.25 percent interest.Today,he gave you the proceeds of that investment which totaled $51,480.79.How much did your father originally invest?

Travis invested $9,250 in an account that pays 6 percent simple interest.How much more could he have earned over a 7-year period if the interest had compounded annually?

Introduction to Corporate Finance

Financial Statements,Taxes,and Cash Flow

Working With Financial Statements

Long-Term Financial Planning and Growth

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Project Analysis and Evaluation

Some Lessons From Capital Market History

Return,Risk,and the Security Market Line

Cost of Capital

Raising Capital

Financial Leverage and Capital Structure Policy

Dividends and Payout Policy

Short-Term Finance and Planning

Cash and Liquidity Management

Credit and Inventory Management

International Corporate Finance

Behavioral Finance: Implications for Financial Management

Enterprise Risk Management

Options and Corporate Finance

Option Valuation

Mergers and Acquisitions

Leasing

Filters

Exam 5: Introduction to Valuation: The Time Value of Money

Which one of the following will produce the highest present value interest factor?

Terry is calculating the present value of a bonus he will receive next year.The process he is using is called:

At 8 percent interest,how long would it take to quadruple your money?

Gerold invested $5,600 in an account that pays 5 percent simple interest.How much money will he have at the end of ten years?

You are scheduled to receive $30,000 in two years.When you receive it,you will invest it for 5 more years,at 6 percent per year.How much money will you have 7 years from now?

Your father invested a lump sum 26 years ago at 4.25 percent interest.Today,he gave you the proceeds of that investment which totaled $51,480.79.How much did your father originally invest?

Travis invested $9,250 in an account that pays 6 percent simple interest.How much more could he have earned over a 7-year period if the interest had compounded annually?

Introduction to Corporate Finance

Financial Statements,Taxes,and Cash Flow

Working With Financial Statements

Long-Term Financial Planning and Growth

Discounted Cash Flow Valuation

Interest Rates and Bond Valuation

Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Project Analysis and Evaluation

Some Lessons From Capital Market History

Return,Risk,and the Security Market Line

Cost of Capital

Raising Capital

Financial Leverage and Capital Structure Policy

Dividends and Payout Policy

Short-Term Finance and Planning

Cash and Liquidity Management

Credit and Inventory Management

International Corporate Finance

Behavioral Finance: Implications for Financial Management

Enterprise Risk Management

Options and Corporate Finance

Option Valuation

Mergers and Acquisitions

Leasing

Filters