Question 1

The obligation for deferred income taxes is the only long-term liability that is not reported at its present value.

Accepted Answer

A) True 
 B)False

Question 2

Belle invests $200 at the end of each year in a savings account which pays 5% annually. How much will Belle have at the end of 5 years?

Accepted Answer

A)  $1,000. 
B)  $1,105.13. 
C)  $1,077.50. 
D)  $1,082.37. 
A)  $1,000. 
B)  $1,105.13. 
C)  $1,077.50. 
D)  $1,082.37.

Question 3

A scholarship fund has $75,000 to invest now to provide scholarships to high school students. They want to have at least $150,000 in 8 years. What rate of interest must they invest this money at to reach their goal?

Accepted Answer

A)  8%. 
B)  9%. 
C)  10%. 
D)  11%. 
A)  8%. 
B)  9%. 
C)  10%. 
D)  11%.

Question 4

Compounding interest assumes the interest on an investment is reinvested.

Accepted Answer

A) True 
 B)False

Question 5

Powers Company wishes to issue $2,000,000 of 8%, 10 year bonds which pay interest semi-annually. The current discount rate is 6%. What amount should the bonds sell for?

Accepted Answer

The answer of Powers Company wishes to issue $2,000,000 of...

Question 6

The future amount of an annuity is calculated by multiplying the periodic payment amount by the discounted factor from the future value of an annuity table.

Accepted Answer

A) True 
 B)False

Question 7

If you receive $20,000 as a gift and invest it at 12% compounded quarterly, how much will you have at the end of three years?

Accepted Answer

A)  $32,020.60. 
B)  $28,515.20. 
C)  $22,497.20. 
D)  $14,027.60. 
A)  $32,020.60. 
B)  $28,515.20. 
C)  $22,497.20. 
D)  $14,027.60.

Question 8

The present value of a cash amount:

Accepted Answer

A)  Is always less than the future value. 
B)  Is always more than the future value. 
C)  Is the same as the future value. 
D)  Is the same as the actual cash value. 
A)  Is always less than the future value. 
B)  Is always more than the future value. 
C)  Is the same as the future value. 
D)  Is the same as the actual cash value.

Question 9

Annuities may provide equal amounts to an investor at fixed periods of time over the life of an investment.

Accepted Answer

A) True 
 B)False

The obligation for deferred income taxes is the only long-term liability that is not reported at its present value.

Belle invests $200 at the end of each year in a savings account which pays 5% annually. How much will Belle have at the end of 5 years?

A scholarship fund has $75,000 to invest now to provide scholarships to high school students. They want to have at least $150,000 in 8 years. What rate of interest must they invest this money at to reach their goal?

Compounding interest assumes the interest on an investment is reinvested.

Powers Company wishes to issue $2,000,000 of 8%, 10 year bonds which pay interest semi-annually. The current discount rate is 6%. What amount should the bonds sell for?

The future amount of an annuity is calculated by multiplying the periodic payment amount by the discounted factor from the future value of an annuity table.

If you receive $20,000 as a gift and invest it at 12% compounded quarterly, how much will you have at the end of three years?

The present value of a cash amount:

Annuities may provide equal amounts to an investor at fixed periods of time over the life of an investment.

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

Filters

Exam 27: The Time Value of Money: Future Amounts and Present Values Answer Key

The obligation for deferred income taxes is the only long-term liability that is not reported at its present value.

Belle invests $200 at the end of each year in a savings account which pays 5% annually. How much will Belle have at the end of 5 years?

A scholarship fund has $75,000 to invest now to provide scholarships to high school students. They want to have at least $150,000 in 8 years. What rate of interest must they invest this money at to reach their goal?

Compounding interest assumes the interest on an investment is reinvested.

Powers Company wishes to issue $2,000,000 of 8%, 10 year bonds which pay interest semi-annually. The current discount rate is 6%. What amount should the bonds sell for?

The future amount of an annuity is calculated by multiplying the periodic payment amount by the discounted factor from the future value of an annuity table.

If you receive $20,000 as a gift and invest it at 12% compounded quarterly, how much will you have at the end of three years?

The present value of a cash amount:

Annuities may provide equal amounts to an investor at fixed periods of time over the life of an investment.

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

Filters