Study guide for exam 1 - part 1 - F1515 Exam 1 Study Guide...

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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' V mn111h1c-cpogce dncaqon (19911118 M1111 1pc concchxa 011.11me AS11192? b19291]; A91nca smq lCO B mpgcp M111 p9 as1ecxeq s; Lsmqom {01. Ron :0 ma; 1116A sac cups 1p110m1u8 mbca: 1101 1:119 :ngq‘ 1.0m. um; um: daemon? 1119 13001 a; bomenqs1 (1119211011212 2‘ £11199 0;. V mn111b1s-cp01ce dneaqou (19911118 mm: x119 conccbxa 01130an an Mam cums? OI. chca‘ V mnmbp-cpogcc dnsaqon (19911118 mm: {119 coucebta 0110:9192: 19:92” AM smq ponq 1C0 D 2916mm 9: Lsuqom £01 Ian {0 1910; 11191 919 01 £119 {0110114118 £11292: Em 1pc accouq ducaqon’ {p9 boo1ogboxeuqs1 dnsaqoue 12 3’ one 01‘ M11101: M111 ps V 111111111119 apogee daemon (19911118 my}! cps cancel); o1 EAV OI. pnqfis; suq (pen 921(1118 mp9; mon1q p9 5119 smwfie 092p 8911) 011023 {0L {119 gun V 0910119qu {Abs 0; ummbm—cpogcc b10p1sm 921008 A011 :0 COUZIIJ’ICI 9 mqgmcmmk 09211 lCO G 9; umqow {01. A00 :0 {914: max 919 01 £119 {0110110118 mbcz: E01 1:119 1.11.2; daemon“ [119 13001 ogboxcuqsq dncaqona 12 5“ one 01 M11101! M111 pc ae1ccmq 1101112 :0 cowb1excgr 1,1na’ 1; (2911 0111A p9 {9111911 one an"; 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 7 . 00 (“5000001, (3,50 , (>030 ., 3 _ ,_ "\ 'l . E-\ 3 4C“! HW’VT‘EE 53%} it ~ O a) 31-: O 3 :3: x O . k - , ,9 k" +33 +3333 u a __~ + (z .moo 3 535 000) m R‘ Iv, I x -‘ -- G i s "‘3 {,3} “M , r. '2 ’ . e 3‘ a a O ,, ,, ‘ " _ \ . j l + \ f) U, C ' C?) X L} ' / l I“, r‘ O L ‘ f: {3 g l 00% A\® V’ cm C5 \1 " ...
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