Chapter 6 quiz 201

Intermediate Accounting

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Accounting 201 Name ___________________________ Chapter 6 Quiz Present and future value tables of $1 at 3% are presented below: 1. Today Thomas deposited $100,000 in a three-year, 12% CD that compounds quarterly. What is the maturity value of the CD? A. $109,270. B. $119,410. C. $142,576. D. $309,090. 2. Carol wants to invest money in a 6% CD account that compounds semiannually. Carol would like the account to have a balance of $50,000 five years from now. How much must Carol deposit to accomplish her goal? A. $35,069. B. $43,131. C. $37,205. D. $35,000. 3. Shane wants to invest money in a 6% CD account that compounds semiannually. Shane would like the account to have a balance of $100,000 four years from now. How much must Shane deposit to accomplish his goal? A. $88,848. B. $78,941. C. $25,336. D. $22,510.
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4. Bill wants to give Maria a $500,000 gift in seven years. If money is worth 6% compounded semiannually, what is Maria's gift worth today? A. $ 66,110. B. $ 81,310. C. $406,550. D. $330,560. 5. Monica wants to sell her share of an investment to Barney for $50,000 in three years. If money is worth 6% compounded semiannually, what would Monica accept today? A. $ 8,375. B. $41,874. C. $11,941. D. $41,000. 6. At the end of the next four years, a new machine is expected to generate net cash flows of $8,000, $12,000, $10,000, and $15,000, respectively. What are the cash flows worth today if a 3% interest rate properly reflects the time value of money in this situation? A. $41,556. B. $47,700. C. $32,400. D. $38,100. 7. At the end of each quarter, Patti deposits $500 into an account that pays 12% interest compounded quarterly. How much will Patti have in the account in three years? A. $7,096. B. $7,013. C. $7,129. D. $8,880. 8. Sondra deposits $2,000 in an IRA account on April 15, 2009. Assume the account will earn 3% annually. If she repeats this for the next nine years, how much will she have on deposit on April 14, 2019? A. $20,600. B. $20,728. C. $23,616. D. $24,715. 9. Shelley wants to cash in her winning lottery ticket. She can either receive ten, $100,000 semiannual payments starting today, or she can receive a lump-sum payment now based on a 6% annual interest rate. What is the equivalent lump-sum payment? A. $853,020. B. $801,971. C. $744,090. D. $878,611.
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10. On January 1, 2009, you are considering making an investment that will pay three annual payments of $10,000. The first payment is not expected until December 31, 2011. You are eager to earn 3%. What is the present value of the investment on January 1, 2009? A. $26,662. B. $27,462. C. $28,286. D. $29,135.
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Chapter 6 quiz 201 - Accounting 201 Chapter 6 Quiz Name _...

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