{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Finance ch. 5

# Finance ch. 5 - E 12 Columbus Corp borrowed \$10,000 at a...

This preview shows pages 1–2. Sign up to view the full content.

10. Your girlfriend just won the Power Ball lottery. She has the choice of \$10,000,000 today or a 30- year annuity of \$500,000, with the first payment coming today. What rate of return is built into the annuity? A) 3.08% B) 3.91% C) 2.71% D) 4.10% E) 3.59% Points Earned: 2.5/5.0 Correct Answer(s): A 11. You can buy a perpetuity that pays \$1,000 annually, and your required rate of return on this investment is 15%. You should be indifferent to buying or not buying the investment if it were offered at a price of Points Earned: 5.0/5.0 Correct Answer(s):

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: E 12. Columbus Corp. borrowed \$10,000 at a rate of 8%, simple interest , with interest paid at the end of each month. The bank uses a 360-day year. How much interest would the firm have to pay in a 30-day month? A) \$43.65 B) \$34.54 C) \$66.67 D) \$51.29 E) \$27.84 Points Earned: 5.0/5.0 Correct Answer(s): C 13. In 1958 the average tuition for one year at an Ivy League school was \$1,800. Thirty years later, in 1988, the average cost was \$13,700. What was the growth rate in tuition over the 30-year period? A) 12% B) 9% C) 7% D) 6% E) 8% Points Earned: 5.0/5.0 Correct Answer(s): C...
View Full Document

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern