Answer Key Chapter 6 Quiz.f11.

Answer Key Chapter 6 Quiz.f11. - PV = $250,000 * PVF 7,10%...

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Name _______________________________________ Quiz Chapter 6 ACG 301 Fall 2011 Choose the most correct answer. 1. What is interest? A) Payment for the use of money. B) An equity investment. C) Return on capital. D) Loan. 2. Which of the following tables would show the largest value for an interest rate of 10% for 8 periods? A) Future amount of 1 table. B) Present value of 1 table. C) Future amount of an ordinary annuity of 1 table. D) Present value of an ordinary annuity of 1 table. 3. Mordica Company will receive $250,000 in 7 years. If the appropriate interest rate is 10%, the present value of the $250,000 receipt is A) $127,500. B) $128,290. C) $377,500. D) $487,180.
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Unformatted text preview: PV = $250,000 * PVF 7,10% 4. Altman Company will invest $500,000 today. The investment will earn 6% for 5 years, with no funds withdrawn. In 5 years, the amount in the investment fund is A) $500,000. B) $650,000. C) $669,115. FV = $500,00 * FVF 5, 6% 5. On January 1, 2012, Tipson Corporation will invest $15,000 every January 1st for the next six years (2012 2017). If Linton will earn 12% on the investment, what amount will be in the investment fund on December 31, 2017? A) $61,671 B) $69,072. C) $121,728. D) $136,335. FVAD = $15,000 * FVAD 6, 12% OR FVAD = $15,000 * FVOA 6, 12% * (1+.12) Page 1...
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