This preview shows pages 1–3. Sign up to view the full content.

3) A \$120,000.00 investment will pay \$34,883.50 year one, \$43,604.37 year two, \$34,883.50 year thr    [a] 6.25%    [b] 6.50% 1    [c] 6.75% 2    [d] 7.00% 3    [e] 7.25% 4 5 Hint: The necessary formula is IRR = the interest rate that discounts the cash flows equal the initial investment (NPV = 0) There is an example of calculating IRR the text student website chapter 9     8) Ponderosa Co. bonds sell for \$846.04. The coupon rate is 8 percent and the bonds mature in 25 year    [a] 3.18 percent    [b] 4.99 percent 4    [c] 6.36 percent 2.64 this is the correct    [d] 9.34 percent    [e ] 9.64 percent        14) Jorge, Inc., has 200,000 shares of stock outstanding. The firm has an EBIT of \$1 million and inte    [a] \$0.20    [b] \$1.65 EBIT    [c] \$2.97 less:interest    [d] \$3.30 Earnings after interest    [e] \$5.00 Less:tax Net income shares outstanding 19) What is the present value of \$1,969.88 to be received in 10 years if the discount rate is 4% per yea             http://wps.aw.com/aw_gitman_pmfbrief_4/0,10397,1970895-00.html

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

View Full Document
[a] \$1,642.66    [b] \$1,560.86 present value of 1969.88 to b    [c] \$1,458.60    [d] \$1,330.78    [e] \$1,064.62    [a] \$187.50    [b] \$221.00 annuity value    [c] \$248.00    [d] \$269.50    [e] \$286.50   This is an annuity 25) What is the annual rate of return on \$7,000.00 invested for 4 years with an ending value of \$18,7    [a] 1.75%
This is the end of the preview. Sign up to access the rest of the 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