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**Unformatted text preview: **CHAPTER 6 Accounting and the Time Value of Money ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) 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, 4, 6, 7, 11 b. Unknown payments. 10, 11, 12 6, 12, 17 7, 16, 17 2, 6 c. Unknown number of periods. 4, 9 8, 15 2 d. Unknown interest rate. 15, 18 3, 11, 16 7, 9, 14 2, 7 e. Unknown present value. 8, 19 2, 7, 8, 10, 14 2, 3, 4, 5, 6, 8, 12, 17, 18, 19 1, 4, 7, 13, 14 4. Value of a series of irregular deposits; changing interest rates. 3, 5, 8 5. Valuation of leases, pensions, bonds; choice between projects. 6 15 10, 12, 13, 14, 15 3, 5, 6, 8, 9, 10, 13, 14 6. Deferred annuity. 16 7 7. Expected Cash Flows. 20, 21 13, 14 *8. Uses of a calculator. 22, 23, 24 15, 16, 17 6-1 ASSIGNMENT CLASSIFICATION TABLE (BY LEARNING OBJECTIVE) Learning Objectives Brief Exerci ses Exerci ses Probl ems 1. Identify accounting topics where the time value of money is relevant. 2. Distinguish between simple and compound interest. 2 3. Use appropriate compound interest tables. 1 4. Identify variables fundamental to solving interest problems. 5. Solve future and present value of problems. 1, 2, 3, 4, 7, 8 2, 3, 6, 9, 10, 12, 15, 18, 19 1, 2, 3, 5, 7, 9, 10 6. Solve future value of ordinary and annuity due problems. 5, 6, 9, 13 3, 4, 5, 6, 12, 15, 16 1, 2, 3, 4, 5, 7, 8, 9, 10 7. Solve present value of ordinary and annuity due problems. 10, 11, 12, 14, 16, 17 3, 4, 5, 6, 11, 12, 16, 17, 18, 19 1, 2, 3, 4, 5, 7, 8, 9, 10, 13, 14 8. Solve present value problems related to deferred annuities and bonds. 15 7, 8, 13, 14 5, 6, 11, 12 *9. Apply expected cash flows to present value measurement. 20, 21 13, 14 *10. Use a financial calculator to solve time value of money problems. 22, 23, 24 15, 16, 17 6-2 ASSIGNMENT CHARACTERISTICS TABLE 6-3 It e m Description Level of Difficu lty Time (minut es) E 6- 1 Using interest tables. Simple 5–10 E 6- 2 Simple and compound interest computations. Simple 5–10 E 6- 3 Computation of future values and present values. Simple 10–15 E 6- 4 Computation of future values and present values. Moder ate 15–20 E 6- 5 Computation of present value. Simple 10–15 E 6- 6 Future value and present value problems. Moder ate 15–20 E 6- 7 Computation of bond prices. Moder ate 12–17 E 6- 8 Computations for a retirement fund. Simple 10–15 E 6- 9 Unknown rate. Moder ate 5–10 E 6- 10 Unknown periods and unknown interest rate. Simple 10–15 E 6- 11 Evaluation of purchase options. Moder ate 10–15 E 6- 12 Analysis of alternatives. Simple 10–15 6-4 E 6- 13 Computation bond liability. Moder ate 15–20 E 6- 14 Computation of pension liability. Moder ate 15–20 E 6- 15 Investment decision. Moder ate 15–20 E 6- 16 Retirement of debt. Simple 10–15 E 6- 17 Computation of amount of rentals. Simple 10–15 E 6- 18 Least costly payoff—ordinary annuity. Simple...

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