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**Unformatted text preview: **F1515 Exam 1 Study Guide info This exam will consist of 10 questions worth 10 points apiece and you will have two
hours to complete it. Plus, it can only be taken one time. For the first question, the pool of potential questions is 2, one of which will be selected
at random for you to take. They are of the following types: TCO G A calculation type of multiple-choice problem asking you to construct a rudimentary cash
budget and then asking what would be the average cash gain or loss for the ﬁrm. Or A multiple-choice question dealing with the concept of EVA For the second question, the pool of potential questions is 2, one of which will be
selected at random for you to take. They are of the following types: TCO D A multiple-choice question dealing with the concepts of interest rates, YTM and bond
prices- Or A multiple-choice question dealing with the concepts of bonds and yield curves. For the third, four and ﬁfth questions, the pool of potential questions is 5, three of
which will be selected at random for you to take. They are of the following types: TCO B A multiple-choice question dealing with the concepts of future values, present values and
loan amortizations. Or A problem very similar in type to the following: V bL0p1em AGUX 211111191 111 (lbs [0:119 1p110m1n8: 01 10911 smougxsqoua'
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11:12 9mm M111 (2011212; 01.10 dnsaqou‘a many 10 Dogma sbgecc suq Aon M111 119M; Lmo £1212 Exam I 3qu 09qu m0 You are interested in saving money for your ﬁrst house. Your plan is to make regular
deposits into a brokerage account which will earn 10 percent. Your ﬁrst deposit of
$7,000 will be made today. You also plan to make four additional deposits at the
beginning of each of the next four years. Your plan is to increase your deposits by 10
percent a year. (that is your plan is to deposit $7,700 at HI, and $8,470 at t+2, etc.)
How much money will be in your account after ﬁve years? Solution: The answer is $56,367.85. The student can use the numerical solution by multiplying the
annual residual amount by 10% or the use of a calculator. The use of excel is probably
the most efﬁcient method that they can use in this type of problem Or A calculation type of multiple-choice problem asking you to ﬁgure the FY of an amount
for a stated period of time given a certain rate compounded monthly. Or A calculation type of multiple—choice problem asking you to ﬁgure the PV of an amount
to be received in a stated number of years given a certain rate compounded monthly. Or A calculation type of multiple-choice problem asking you to ﬁgure the FV of an amount
in a savings for a stated period of time given a certain rate compounded annually. For the sixth and seventh questions, the pool of potential questions is 3, two of which
will be selected at random for you to take. They are of the following types: TCO A A multiple-choice question dealing with the concepts of partnerships vs. corporations as
forms of organizations. Or A multiple-choice question dealing with the concepts of agency conﬂicts, business
organizations, and general business goals. Or A multiple-choice question asking for the solution, given a set of options, which would
result in an increase in cash ﬂows in the current year for the ﬁrm. Your corporation had the following cash ﬂows last year: Operating income $3,500,000 Interest received J 500,000 - \
Interest paid 850,000 ° ti
Dividends received 300,000
Dividends paid 800,000 Your ﬁrm pays taxes at a rate of 40% (federal and state combined) and was proﬁtable
last ear. Calculate th ﬁ ' rat t 1' b'l't f l t : ,,
y ermscorpo eaxranyorasgri—cbbqaob f A >4 $§0®o®+6bqoo @olution: $1,296,000 3,500 o r 00000 —>‘3\. 000 a
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