RWJ_Sample_Test_questions_Chp_6-7 - Prof Muhtaseb...

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Prof Muhtaseb  Managerial Finance Sample Test questions for chapters 6 and 7  Chapter 6  1. 14. Which one of the following statements is correct given the following two sets of project  cash flows?      A.  The cash flows for Project B are an annuity, but those of Project A are not. B.  Both sets of cash flows have equal present values as of time zero given a positive discount  rate. C.  The present value at time zero of the final cash flow for Project A will be discounted using an  exponent of three. D.  The present value of Project A cannot be computed because the second cash flow is equal  to zero. E.  As long as the discount rate is positive, Project B will always be worth less today than will  Project A 2. 34. You are comparing two annuities with equal present values. The applicable discount rate  is 8.75 percent. One annuity pays $5,000 on the first day of each year for 20 years. How much  does the second annuity pay each year for 20 years if it pays at the end of each year?  A.  $5,211 B.  $5,267 C.  $5,309 D.  $5,390 E.  $5,438
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This note was uploaded on 02/25/2010 for the course FINANCE FI 360 taught by Professor Muhtaseb during the Spring '10 term at Woodbury University.

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RWJ_Sample_Test_questions_Chp_6-7 - Prof Muhtaseb...

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