Question 1

If an arbitrage opportunity exists, an investor can act quickly in the hope of making a risk-free profit.

Accepted Answer

A) True 
 B)False

Question 2

A tenant wants to lease a building for $48 000 per year. She signs a five-year rental agreement that states that she will pay $24 000 every six months for the next five years. Which of the following is the timeline for her rental payments, assuming she makes the first payment immediately?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 3

What is the future value (FV)of $10 000 in eight years, assuming the interest rate is 10% per year?

Accepted Answer

A) $16 212.78 
B) $18 756.22 
C) $21 435.89 
D) $18 000.00 
A) $16 212.78 
B) $18 756.22 
C) $21 435.89 
D) $18 000.00

Question 4

Costs and benefits must be put in common terms if they are to be compared.

Accepted Answer

A) True 
 B)False

Question 5

If an analyst adds cash flows occurring at different points in time, what is the implied assumption in the process?

Accepted Answer

Cash flows occurring at different points

Question 6

Use the information for the question(s)below.
   As an oil refiner, you are able to produce $76.16 worth of unleaded petrol from one barrel of Tapis Outback Crude (TOC)oil. Because of its lower sulphur content, you can produce $77.25 worth of unleaded petrol from one barrel of Western Australian Intermediate (WAI)crude.
-Assuming you just purchased 10 000 tonnes of WAI crude at the current market price, the total benefit (cost)to you if you were to refine this crude oil and sell the unleaded petrol is closest to:

Accepted Answer

A) $774 319 
B) $772 500 
C) $773 024 
D) $773 908 
A) $774 319 
B) $772 500 
C) $773 024 
D) $773 908

Question 7

A metal fabrication company is pricing raw supplies of aluminium. The following are the costs to the company to receive one tonne of aluminium from various sources. Which source offers the best price for aluminium per tonne?

Accepted Answer

A) 3 206 US dollars per tonne, with $1 AUD = $1.05 USD 
B) 3 012 Australian dollars per tonne 
C) 4 998 Brazilian reals per tonne, with $1 AUD = 1.282 BRL 
D) 121 756 Indian rupees per tonne, with $1 AUD = 47.619 INR 
A) 3 206 US dollars per tonne, with $1 AUD = $1.05 USD 
B) 3 012 Australian dollars per tonne 
C) 4 998 Brazilian reals per tonne, with $1 AUD = 1.282 BRL 
D) 121 756 Indian rupees per tonne, with $1 AUD = 47.619 INR

If an arbitrage opportunity exists, an investor can act quickly in the hope of making a risk-free profit.

A tenant wants to lease a building for $48 000 per year. She signs a five-year rental agreement that states that she will pay $24 000 every six months for the next five years. Which of the following is the timeline for her rental payments, assuming she makes the first payment immediately?

What is the future value (FV)of $10 000 in eight years, assuming the interest rate is 10% per year?

Costs and benefits must be put in common terms if they are to be compared.

If an analyst adds cash flows occurring at different points in time, what is the implied assumption in the process?

A metal fabrication company is pricing raw supplies of aluminium. The following are the costs to the company to receive one tonne of aluminium from various sources. Which source offers the best price for aluminium per tonne?

Corporate Finance and the Financial Manager

Introduction to Financial Statement Analysis

Time Value of Money: Valuing Cash Flow Streams

Interest Rates

Bond Valuation

Share Valuation: the Dividend-Discount Model

Investment Decision Rules

Fundamentals of Capital Budgeting

Share Valuation: a Second Look

Risk and Return in Capital Markets

Systematic Risk and the Equity Risk Premium

The Cost of Capital

Raising Capital

Debt Financing

Capital Structure

Payout Policy

Financial Modelling and Pro-Forma Analysis

Working Capital Management

Option Applications and Corporate Finance

Mergers and Acquisitions

International Corporate Finance

Insurance and Risk Management

Filters

Exam 3: Time Value of Money: an Introduction

If an arbitrage opportunity exists, an investor can act quickly in the hope of making a risk-free profit.

A tenant wants to lease a building for $48 000 per year. She signs a five-year rental agreement that states that she will pay $24 000 every six months for the next five years. Which of the following is the timeline for her rental payments, assuming she makes the first payment immediately?

What is the future value (FV)of $10 000 in eight years, assuming the interest rate is 10% per year?

Costs and benefits must be put in common terms if they are to be compared.

If an analyst adds cash flows occurring at different points in time, what is the implied assumption in the process?

A metal fabrication company is pricing raw supplies of aluminium. The following are the costs to the company to receive one tonne of aluminium from various sources. Which source offers the best price for aluminium per tonne?

Corporate Finance and the Financial Manager

Introduction to Financial Statement Analysis

Time Value of Money: Valuing Cash Flow Streams

Interest Rates

Bond Valuation

Share Valuation: the Dividend-Discount Model

Investment Decision Rules

Fundamentals of Capital Budgeting

Share Valuation: a Second Look

Risk and Return in Capital Markets

Systematic Risk and the Equity Risk Premium

The Cost of Capital

Raising Capital

Debt Financing

Capital Structure

Payout Policy

Financial Modelling and Pro-Forma Analysis

Working Capital Management

Option Applications and Corporate Finance

Mergers and Acquisitions

International Corporate Finance

Insurance and Risk Management

Filters