Question 1

The future value of an ordinary annuity is the accumulated value of each annuity payment with interest one period after the date of the final payment.

Accepted Answer

A) True 
 B)False  False

Question 2

Explain the concept of the future value of a single amount.

Accepted Answer

The future value of a single amount is equal to the amount that would accumulate at a future date at a specified rate of interest.

Question 3

A company can use present and future value computations to estimate the interest component of holding assets over time.

Accepted Answer

A) True 
 B)False  True

Question 4

Match between columns
                        Premises:  An unincorporated association of two or more persons to pursue a business for profit as co-owners.
 The agreement between partners that sets terms under which the affairs of the partnership are conducted.
 A financial statement that shows total capital balances at the beginning of the period, any additional investment by partners, the income or loss of the period, the partners' withdrawals and the ending capital balances.
 The legal relationship among general partners that makes each of them responsible for paying the debts of the partnership if the other partners are unable to pay their shares.
 A corporation that meets special tax qualifications so as to be treated like a partnership for income tax purposes.
 A partner who assumes unlimited liability for the debts of the partnership.
 A corporation that does not qualify for and elect to be treated like a partnership for income tax purposes and therefore is subject to income taxes.
 A partnership that has two classes of partners, limited partners and general partners. Limited partners have no personal liability beyond the amount they invest in the partnership and have no active role except as specified in the partnership agreement.
 A partnership that protects innocent partners from malpractice or negligence claims resulting from the acts of another partner.
 The legal relationship among partners whereby each partner can commit or bind the partnership to any contract within the scope of the partnership's business.

Accepted Answer

The Answer of Statement of changes in partner’s equity and is...

Question 5

How long will it take an investment of $25,000 at 6% compounded annually to accumulate to a total of $35,462.50?

Accepted Answer

A) 4 years 
B) 5 years 
C) 6 years 
D) 2 years 
E) 10 years 
A) 4 years 
B) 5 years 
C) 6 years 
D) 2 years 
E) 10 years

Question 6

With deposits of $5,000 at the end of each year,you will have accumulated $38,578 at the end of the sixth year if the annual rate of interest is 10%.

Accepted Answer

A) True 
 B)False

Question 7

_____________ is a borrower's payment to the owner of an asset for its use.

Accepted Answer

The answer of _____________ is a borrower's payment to the...

Question 8

The future value of an ________________ annuity is the accumulated value of each annuity payment with interest as of the date of the final payment.

Accepted Answer

The answer of The future value of an ________________ annuity...

Question 9

Madera Iron Sculpting is planning to save the money needed to replace one of its robotic welders in five years by making a one-time deposit of $20,000 today and four yearly contributions of $5,000 beginning at the end of year 1.The deposits will earn 10% interest.How much money will Sierra have accumulated at the end of five years to replace the welder?

Accepted Answer

@#IMG-DLM&_TB6312_00

Question 10

An individual is planning to set-up an education fund for her children.She plans to invest $10,000 annually at the end of each year.She expects to withdraw money from the fund at the end of 10 years and expects to earn an annual return of 8%.What will be the total value of the fund at the end of 10 years?

Accepted Answer

A)  $ 46,320 
B)  $ 67,107 
C)  $100,000 
D)  $144,870 
E)  $215,890 
A)  $ 46,320 
B)  $ 67,107 
C)  $100,000 
D)  $144,870 
E)  $215,890

Question 11

A company needs to have $200,000 in four years,and will create a fund to ensure that the $200,000 will be available.If they can earn a 7% return,how much must the company invest in the fund today to equal the $200,000 at the end of four years?

Accepted Answer

$200,000 x

Question 12

An interest rate is also called a discount rate.

Accepted Answer

A) True 
 B)False

Question 13

An ordinary annuity refers to a series of equal payments made or received at the end of equal intervals.

Accepted Answer

A) True 
 B)False

Question 14

Thompson Company has acquired a machine from a dealer which requires a payment of $45,000 at the end of five years.This transaction includes interest at 8%,compounded semiannually.What is the value of the machine today?

Accepted Answer

$45,000 x

Question 15

Troy has $105,000 now.He has a loan of $175,000 that he must pay at the end of five years.He can invest his $105,000 at 10% interest compounded semiannually.Will Troy have enough to pay his loan at the end of the five years?

Accepted Answer

$105,000 x 1.6289 =

Question 16

A company is creating a fund by depositing $65,763 today.The fund will grow to $90,000 after eight years.What annual interest rate is the company earning on the fund?

Accepted Answer

$65,763/$90,000 = 0.7307
This

Question 17

To calculate present value of an amount,two factors are required: __________________ and ___________________.

Accepted Answer

interest r

Question 18

At an annual interest rate of 8% compounded annually,$5,300 will accumulate to a total of $7,210.65 in five years.

Accepted Answer

A) True 
 B)False

Question 19

A company is setting aside $21,354 today and wishes to have $30,000 at the end of three years for a down payment on a piece of property.What interest rate must the company earn?

Accepted Answer

$21,354/$30,000 = 0.7118
This is the pre

Question 20

The number of periods in a present value calculation can only be expressed in years.

Accepted Answer

A) True 
 B)False

Exam 26: Time Value of Money

The future value of an ordinary annuity is the accumulated value of each annuity payment with interest one period after the date of the final payment.

Explain the concept of the future value of a single amount.

A company can use present and future value computations to estimate the interest component of holding assets over time.

How long will it take an investment of $25,000 at 6% compounded annually to accumulate to a total of $35,462.50?

With deposits of $5,000 at the end of each year,you will have accumulated $38,578 at the end of the sixth year if the annual rate of interest is 10%.

_____________ is a borrower's payment to the owner of an asset for its use.

The future value of an ________________ annuity is the accumulated value of each annuity payment with interest as of the date of the final payment.

A company needs to have $200,000 in four years,and will create a fund to ensure that the $200,000 will be available.If they can earn a 7% return,how much must the company invest in the fund today to equal the $200,000 at the end of four years?

An interest rate is also called a discount rate.

An ordinary annuity refers to a series of equal payments made or received at the end of equal intervals.

Thompson Company has acquired a machine from a dealer which requires a payment of $45,000 at the end of five years.This transaction includes interest at 8%,compounded semiannually.What is the value of the machine today?

Troy has $105,000 now.He has a loan of $175,000 that he must pay at the end of five years.He can invest his $105,000 at 10% interest compounded semiannually.Will Troy have enough to pay his loan at the end of the five years?

A company is creating a fund by depositing $65,763 today.The fund will grow to $90,000 after eight years.What annual interest rate is the company earning on the fund?

To calculate present value of an amount,two factors are required: __________________ and ___________________.

At an annual interest rate of 8% compounded annually,$5,300 will accumulate to a total of $7,210.65 in five years.

A company is setting aside $21,354 today and wishes to have $30,000 at the end of three years for a down payment on a piece of property.What interest rate must the company earn?

The number of periods in a present value calculation can only be expressed in years.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing

Activity-Based Costing and Analysis

Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Decentralization and Performance Measurement

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Accounting With Special Journals

Investments and International Operations

Accounting for Partnerships

Filters

To calculate present value of an amount,two factors are required: and _.