# CH06 - CHAPTER 6 Accounting and the Time Value of Money...

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CHAPTER 6 Accounting and the Time Value of Money ASSIGNMENT CLASSIFICATION TABLE Topics Questions Brief Exercises Exercises Problems 1. Present value concepts. 1, 2, 3, 4, 5, 9, 17 2. Use of tables. 13, 14 8 1 3. Present and future value problems: a. Unknown future amount. 7, 19 1, 5, 13 2, 3, 4, 6, 8, 9, 13 b. Unknown payments. 10, 11, 12 6, 12, 17 8, 18, 20 2, 8 c. Unknown number of periods. 4, 9 9, 10, 17 2 d. Unknown interest rate. 15, 18 3, 11, 16 9, 10, 20, 21, 22 2, 11 e. Unknown present value. 8, 19 2, 7, 8, 10, 14 3, 4, 5, 6, 7, 10, 14, 21, 22 1, 6, 11 4. Value of a series of irregular deposits; changing interest rates. 3, 5, 10 5. Valuation of leases, pensions, bonds; choice between projects. 6 15 11, 12, 15, 16, 17, 19 4, 5, 7, 9, 12, 13, 14, 15, 16, 17, 18 6. Deferred annuity. 16 9, 16 7. Uses of a calculator. 23, 24, 25 19, 20, 21 6-1

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ASSIGNMENT CHARACTERISTICS TABLE It e m Description Level of Diffic ulty Time (minu tes) E 6- 1 Using interest tables. Simpl e 5-10 E 6- 2 Simple and compound interest computations. Simpl e 5-10 E 6- 3 Computation of future amounts and present values. Simpl e 10-15 E 6- 4 Annuity due problems. Mode rate 15-20 E 6- 5 Ordinary annuity problems. Simpl e 10-15 E 6- 6 Future amount and present value problems. Mode rate 15-20 E 6- 7 Computation of bond prices. Mode rate 12-17 E 6- 8 Computations for a retirement fund. Simpl e 10-15 E 6- 9 Unknown interest rate. Mode rate 10 E 6- 10 Unknown periods and unknown interest rate. Simpl e 10-15 E 6- 11 Analysis of financing options. Mode rate 10-15 E 6- 12 Analysis of alternatives. Simpl e 10-15 E 6- 13 Future amount and changing interest rates. Mode rate 10-15 E 6- 14 Amount needed to retire stock. Mode rate 15-20 E 6- 15 Computation of present value of bonds. Mode rate 15-20 6-2
E 6- 16 Computation of pension liability. Mode rate 15-20 E 6- 17 Unknown Periods, deferred annuity. Mode rate 15-20 E 6- 18 Retirement of debt. Simpl e 10-15 E 6- 19 Present value of a bond. Simpl e 10-15 E 6- 20 Computation of amount of rentals. Simpl e 10-15 E 6- 21 Least costly payoff—ordinary annuity. Simpl e 10-15 E 6- 22 Least costly payoff—annuity due. Simpl e 10-15 E 6- 23 Determining the interest rate with a calculator. Simpl e 3-5 E 6- 24 Determining the interest rate with a calculator Simpl e 3-5 E 6- 25 Determining the interest rate with a calculator. Simpl e 3-5 P 6- 1 Computation of present value. Mode rate 15-20 P 6- 2 Computation of unknown interest factors. Mode rate 15-20 P 6- 3 Future amounts of annuities due. Simpl e 10-15 P 6- 4 Analysis of alternatives. Mode rate 20-30 P 6- 5 Computation of unknown interest factors. Mode rate 15-20 P 6- 6 Analysis of alternatives. Mode rate 10-15 P 6- 7 Analysis of alternatives. Mode rate 20-25 6-3

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P 6- 8 Computation of unknown payments. Mode rate 15-20 P 6- 9 Purchase price of a business (deferred annuities). Mode rate 25-30 P 6- 10 Annuity with varying interest rates. Mode rate 20-25 P 6- 11 Time value concepts applied to solve business
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## This note was uploaded on 06/01/2008 for the course ACC 305 taught by Professor Gal during the Spring '08 term at Rutgers.

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CH06 - CHAPTER 6 Accounting and the Time Value of Money...

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