23.
24.
25.What is the present value of $2,000 to be received in six years if interest rates are 8% compounded semiannually? (Round to the nearest whole dollar)
A.$1,258B.$1,158C.$1,852D.$1,923E.$1,249
Review OnlyFind the present value of the following mixed stream of cash flows using a discount rate of %. Assume the cash flows are received at the end of each year. 7YearCash Flow Stream13,00029,00038,000Click the icon to see the Worked Solution (Formula Solution).Click the icon to see the Worked Solution (Financial Calculator Solution).Click the icon to see the Worked Solution (Spreadsheet Solution).YearCash Flow Stream13,00029,00038,000Present Value ($) =(Round to the nearest cent.)Suzanne has identified a project with the following cash flows. What is the present value of the cash flows at time 0 if the interest rate is 9%?YearCash Flow1$2,0002$6503$3754$1,200
Chapter 3 Practice Test
8 of 10
9/17/16, 9:26 AM

1.
E.
Receiving cash today enables one to take advantage of current investment opportunities.
2.
B.
Compound interest entails receiving interest payments on previously earned interest.
3.
C.
Present value
4.
A.
Lower
5.
D.
The discount rate decreases.
6.
C.
The present value of all future cash flows expected from the asset.
7.
B.
$12
8.
1,835.41
4,224.79
539.54
9.
C.
$1.15
10.
B.
$4,060.69
11.
D.
$2,728.40
12.
A.
$87,163.39
13.
36,531.66
14.
D.
$8,141
15.
−
7.86
16.
B.
7%
17.
8
Chapter 3 Practice Test
9 of 10
9/17/16, 9:26 AM

18.
E.
8
19.
0.0038
20.
C.
8.33%
21.
48.68
63.91
472.17
22.
A.
The later payment since the present value of the $2,000,000 payment is $1,227,827.
23.
E.
$1,249
24.
17,195.07
25.
B.
$3,521.63
Chapter 3 Practice Test
10 of 10
9/17/16, 9:26 AM

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