Exam 4: The Time Value of Money
Exam 1: The Corporation38 Questions
Exam 2: Introduction to Financial Statement Analysis103 Questions
Exam 3: Financial Decision Making and the Law of One Price89 Questions
Exam 4: The Time Value of Money91 Questions
Exam 5: Interest Rates68 Questions
Exam 6: Valuing Bonds115 Questions
Exam 7: Investment Decision Rules86 Questions
Exam 8: Fundamentals of Capital Budgeting95 Questions
Exam 9: Valuing Stocks96 Questions
Exam 10: Capital Markets and the Pricing of Risk103 Questions
Exam 11: Optimal Portfolio Choice and the Capital Asset Pricing Model134 Questions
Exam 12: Estimating the Cost of Capital104 Questions
Exam 13: Investor Behavior and Capital Market Efficiency77 Questions
Exam 14: Capital Structure in a Perfect Market99 Questions
Exam 15: Debt and Taxes95 Questions
Exam 16: Financial Distress,managerial Incentives,and Information111 Questions
Exam 17: Payout Policy96 Questions
Exam 18: Capital Budgeting and Valuation With Leverage99 Questions
Exam 19: Valuation and Financial Modeling: a Case Study49 Questions
Exam 20: Financial Options57 Questions
Exam 21: Option Valuation43 Questions
Exam 22: Real Options64 Questions
Exam 23: Raising Equity Capital52 Questions
Exam 24: Debt Financing54 Questions
Exam 25: Leasing46 Questions
Exam 26: Working Capital Management48 Questions
Exam 27: Short-Term Financial Planning47 Questions
Exam 28: Mergers and Acquisitions59 Questions
Exam 29: Corporate Governance46 Questions
Exam 30: Risk Management53 Questions
Exam 31: International Corporate Finance45 Questions
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Use the information for the question(s)below.
Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's college education.Currently,college tuition,books,fees,and other costs,average $12,500 per year.On average,tuition and other costs have historically increased at a rate of 4% per year.
-Assuming that college costs continue to increase an average of 4% per year and that all her college savings are invested in an account paying 7% interest,then the amount of money she will need to have available at age 18 to pay for all four years of her undergraduate education is closest to:
(Essay)
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How do you calculate (mathematically)the present value of a(n):
(a)perpetuity
(b)annuity
(c)growing perpetuity
(d)growing annuity
(Essay)
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You have an $8000 balance on your credit card,which charges 18% interest annually (1% per month).If you can afford to pay $100 per month,how many months will it take to pay the credit card in full?
(Multiple Choice)
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You are considering investing in a security that will pay you $80 in interest at the end of each of the next 10 years.If this security is currently selling for $588.81,then the IRR for investing in this security is closest to:
(Multiple Choice)
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If the current rate of interest is 8%,then the present value of an investment that pays $1000 per year and lasts 20 years is closest to:
(Multiple Choice)
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Consider the following timeline detailing a stream of cash flows:
If the current market rate of interest is 8%,then the future value of this stream of cash flows is closest to:

(Multiple Choice)
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If the appropriate interest rate is 8%,then present value of $500 paid at the beginning of each of the next 40 years is closest to:
(Multiple Choice)
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Use the following information to answer the question(s)below.
Nielson Motors is considering an opportunity that requires an investment of $1,000,000 today and will provide $250,000 one year from now,$450,000 two years from now,and $650,000 three years from now.
-The Internal Rate of return of this project is closest to:
(Multiple Choice)
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You are considering purchasing a new home.You will need to borrow $250,000 to purchase the home.A mortgage company offers you a 15 year fixed rate mortgage (180 months)at 9% APR (0.75% month).If you borrow the money from this mortgage company,your monthly mortgage payment will be closest to:
(Multiple Choice)
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You are thinking about investing in a mine that will produce $10,000 worth of ore in the first year.As the ore closest to the surface is removed it will become more difficult to extract the ore.Therefore,the value of the ore that you mine will decline at a rate of 8% per year forever.If the appropriate interest rate is 6%,then the value of this mining operation is closest to:
(Multiple Choice)
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Which of the following statements regarding growing perpetuities is FALSE?
(Multiple Choice)
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Which of the following statements regarding perpetuities is FALSE?
(Multiple Choice)
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If the appropriate interest rate is 15%,then Nielson Motors should:
(Multiple Choice)
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Suppose that you are considering an investment that will pay you $4000 per year for the next five years.The appropriate rate of interest is 5%.You want to know the present value of the cash flows from this investment.To solve this problem in Microsoft Excel,you would use which of the following excel formulas?
(Multiple Choice)
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Which of the following statements regarding annuities is FALSE?
(Multiple Choice)
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If the current rate of interest is 8%,then the future value 20 years from now of an investment that pays $1000 per year and lasts 20 years is closest to:
(Multiple Choice)
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If the appropriate interest rate is 8%,then present value of $500 paid at the end of each of the next 40 years is closest to:
(Multiple Choice)
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