q1version1 (3)

q1version1 (3) - MGT 3078 FINANCIAL MANAGEMENT SPRING 2011...

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

View Full Document Right Arrow Icon
MGT 3078 FINANCIAL MANAGEMENT SPRING 2011 QUIZ 1 Student: ____________________________________________________ ID: ______________________ Choose the BEST answer to each question. Bubble in your answer on the form provided. If you feel the answer is not provided, show your work, explain your assumptions, and write your answer on the exam. Remove all hats and dark glasses. If you have to go to the restroom, go now. No electronic devices allowed. You may not use your cell phone as a calculator. As a courtesy to your classmates, no questions are allowed after the initial instructions are given. Ethics Challenge: I certify by my signature that: the work on this exam is my own without any outside assistance, that I did not provide assistance to another classmate, that I used no electronic devices for information storage, retrieval, or communications, that I have abided by the Georgia Tech honor code in the preparation and execution of this exam. I further understand that my professor will do everything within his power to expel me from Georgia Tech if I am found in violation of the Georgia Tech honor code. Signature:____________________________________________________________________________ 1. You just won the grand prize in a national writing contest! As your prize, you will receive $2,000 a month for ten years. If you can earn 7 percent on your money, what is this prize worth to you today? A. $178,411.06 B. $185,333.33 C. $172,252.71 D. $181,338.40 E. $190,450.25 2. This morning, you borrowed $150,000 to buy a house. The mortgage rate is 7.35 percent. The loan is to be repaid in equal monthly payments over 20 years. The first payment is due one month from today. How much of the second payment applies to the principal balance? (Assume that each month is equal to 1/12 of a year.) A. $925.83 B. $1,194.67 C. $917.06 D. $268.84 E. $277.61 3. You are borrowing $17,800 to buy a car. The terms of the loan call for monthly payments for 5 years at 8.6 percent interest. What is the amount of each payment? A. $342.76 B. $366.05 C. $301.12 D. $287.71 E. $291.40 4. Your credit card company quotes you a rate of 17.9 percent. Interest is billed monthly. What is the actual rate of interest you are paying? A. 19.72 percent B. 19.44 percent C. 19.57 percent D. 19.21 percent E. 19.03 percent THE BUSINESS SCHOOL AT GEORGIA TECH Barry Marchman, Ph.D. Room 413 (404) 894-5110
Background image of page 1

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

View Full DocumentRight Arrow Icon
5. You buy an annuity that will pay you $24,000 a year for 25 years. The payments are paid on the first day of each year. What is the value of this annuity today if the discount rate is 8.5 percent? A. $258,319 B. $241,309 C. $245,621 D. $251,409 E. $266,498 6. Which one of the following best states the primary goal of financial management? A. maximize the current value per share
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 8

q1version1 (3) - MGT 3078 FINANCIAL MANAGEMENT SPRING 2011...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online