Exam 10: Choices Involving Time

-Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company.Assume an interest rate of 5%.Which project should the company choose if they want to maximize their return?

(Multiple Choice)

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Question 21

-Refer to Figure 10.1.Which line represents wealth?

(Multiple Choice)

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Question 22

Which of following statements about bonds is NOT true?

(Multiple Choice)

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Question 23

Suppose you use the rate of inflation as the interest rate for determining the present value of $1.What would the present value of $3,000 received in three equal yearly payments be if the current rate of inflation is 3.5% and increases by 15 basis points each year?

(Essay)

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Question 24

-Refer to Scenario 10.1.What is Jennifer's opportunity cost of one year of college?

(Multiple Choice)

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Question 25

Which of the following is NOT used to describe an investment?

(Multiple Choice)

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Question 26

Which of the following is NOT a reason people save?

(Multiple Choice)

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Question 27

Which of the following is NOT a reason why an increase in the interest rate usually makes investment projects less attractive?

(Multiple Choice)

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Question 28

A chance of default will cause the interest rate to be .

(Multiple Choice)

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Question 29

A project is profitable when its internal rate of return is ______ the interest rate.

(Multiple Choice)

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Question 30

When the interest rate rises,saving becomes rewarding and borrowing becomes costly.

(Multiple Choice)

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Question 31

-Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company.Assume an interest rate of 5%.Which project has the highest internal rate of return?

(Multiple Choice)

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Question 32

What happens to saving when interest rates rise?

(Multiple Choice)

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Question 33

If a bank is lending money at 6.25% while the government is lending money at 8.25% and the rate of inflation is 3.5%,what is the real interest being earned by the bank?

(Multiple Choice)

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Question 34

-Refer to Scenario 10.1.Given this information,what should Jennifer do upon graduating from high school?

(Multiple Choice)

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Question 35

You have made an investment of $250 that will yield a profit of $30 in one year.If the interest rate is 11.5% is this a good investment.

(Multiple Choice)

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Question 36

Suppose you are looking to add more capacity to your current manufacturing plant.The new project will cost $6 million up front and is projected to increase revenue $1.5 million a year for each of the next 5 years.If the interest rate is 8%,what is this project's NPV and is it a profitable investment?

(Multiple Choice)

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Question 37

Given the formula PDV = $F/(1 + R)^T,the PDV is smaller when the number of years is and when the interest rate is .

(Multiple Choice)

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Question 38

Which statement about the Life Cycle Hypothesis is NOT true?

(Multiple Choice)

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Question 39

Suppose you make $1,000 investment today that you believe will have a one time return of $2,500 in 5 years.If the interest rate is 12%,will you have a profitable investment?

(Multiple Choice)

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Question 40

Showing 21 - 40 of 67

-Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company.Assume an interest rate of 5%.Which project should the company choose if they want to maximize their return?

-Refer to Figure 10.1.Which line represents wealth?

Which of following statements about bonds is NOT true?

Suppose you use the rate of inflation as the interest rate for determining the present value of $1.What would the present value of $3,000 received in three equal yearly payments be if the current rate of inflation is 3.5% and increases by 15 basis points each year?

-Refer to Scenario 10.1.What is Jennifer's opportunity cost of one year of college?

Which of the following is NOT used to describe an investment?

Which of the following is NOT a reason people save?

Which of the following is NOT a reason why an increase in the interest rate usually makes investment projects less attractive?

A chance of default will cause the interest rate to be .

A project is profitable when its internal rate of return is ______ the interest rate.

When the interest rate rises,saving becomes rewarding and borrowing becomes costly.

-Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company.Assume an interest rate of 5%.Which project has the highest internal rate of return?

What happens to saving when interest rates rise?

If a bank is lending money at 6.25% while the government is lending money at 8.25% and the rate of inflation is 3.5%,what is the real interest being earned by the bank?

-Refer to Scenario 10.1.Given this information,what should Jennifer do upon graduating from high school?

You have made an investment of $250 that will yield a profit of $30 in one year.If the interest rate is 11.5% is this a good investment.

Given the formula PDV = $F/(1 + R)^T,the PDV is smaller when the number of years is and when the interest rate is .

Which statement about the Life Cycle Hypothesis is NOT true?

Suppose you make $1,000 investment today that you believe will have a one time return of $2,500 in 5 years.If the interest rate is 12%,will you have a profitable investment?

Introduction

Supply and Demand3

Balancing Benefits and Costs

Principles and Preferences

Constraints, Choices, and Demand

Rom Demand to Welfare

Technology and Production

Cost

Rofit Maximization

Choices Involving Risk

Choices Involving Strategy

Behavioral Economics

Equilibrium and Efficiency

Market Intervention

General Equilibrium, Efficiency, and Equity

Monopoly

Pricing Policies

Oligopoly

Externalities and Public Goods

Filters

Exam 10: Choices Involving Time

-Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company.Assume an interest rate of 5%.Which project should the company choose if they want to maximize their return?

-Refer to Figure 10.1.Which line represents wealth?

Which of following statements about bonds is NOT true?

Suppose you use the rate of inflation as the interest rate for determining the present value of $1.What would the present value of $3,000 received in three equal yearly payments be if the current rate of inflation is 3.5% and increases by 15 basis points each year?

-Refer to Scenario 10.1.What is Jennifer's opportunity cost of one year of college?

Which of the following is NOT used to describe an investment?

Which of the following is NOT a reason people save?

Which of the following is NOT a reason why an increase in the interest rate usually makes investment projects less attractive?

A ______ chance of default will cause the interest rate to be ______.

A project is profitable when its internal rate of return is ______ the interest rate.

When the interest rate rises,saving becomes ______ rewarding and borrowing becomes ______ costly.

-Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company.Assume an interest rate of 5%.Which project has the highest internal rate of return?

What happens to saving when interest rates rise?

If a bank is lending money at 6.25% while the government is lending money at 8.25% and the rate of inflation is 3.5%,what is the real interest being earned by the bank?

-Refer to Scenario 10.1.Given this information,what should Jennifer do upon graduating from high school?

You have made an investment of $250 that will yield a profit of $30 in one year.If the interest rate is 11.5% is this a good investment.

Given the formula PDV = $F/(1 + R)T,the PDV is smaller when the number of years is ______ and when the interest rate is ______.

Which statement about the Life Cycle Hypothesis is NOT true?

Suppose you make $1,000 investment today that you believe will have a one time return of $2,500 in 5 years.If the interest rate is 12%,will you have a profitable investment?

Introduction

Supply and Demand3

Balancing Benefits and Costs

Principles and Preferences

Constraints, Choices, and Demand

Rom Demand to Welfare

Technology and Production

Cost

Rofit Maximization

Choices Involving Risk

Choices Involving Strategy

Behavioral Economics

Equilibrium and Efficiency

Market Intervention

General Equilibrium, Efficiency, and Equity

Monopoly

Pricing Policies

Oligopoly

Externalities and Public Goods

Filters

A chance of default will cause the interest rate to be .

When the interest rate rises,saving becomes rewarding and borrowing becomes costly.

Given the formula PDV = $F/(1 + R)^T,the PDV is smaller when the number of years is and when the interest rate is .