36.
What is the future value of $1,200 a year for 40 years at 8 percent interest?
Assume annual compounding.
A. $301,115
B. $306,492
C. $310,868
D. $342,908
E. $347,267
AACSB: Analytic
Blooms: Apply
D
93.
The Pawn Shop loans money at an annual rate of 23 percent and compounds
interest weekly. What is the actual rate being charged on these loans?
A. 25.16 percent
B. 25.80 percent
C. 26.49 percent
D.
68.
Southern Tours is considering acquiring Holiday Vacations. Management
believes Holiday Vacations can generate cash flows of $187,000, $220,000,
and $245,000 over the next three years, respectively
73.
You just signed a consulting contract that will pay you $38,000, $52,000, and
$85,000 annually at the end of the next three years, respectively. What is the
present value of these cash flows given
Section: 6.2
Topic: Loan payment
41.
You borrow $165,000 to buy a house. The mortgage rate is 4.5 percent and the
loan period is 30 years. Payments are made monthly. If you pay the mortgage
according
117. You are preparing to make monthly payments of $72, beginning at the end of
this month, into an account that pays 6 percent interest compounded monthly.
How many payments will you have made when y
Chapter 01 - Introduction to Corporate Finance
19. An annuity:
A. is a debt instrument that pays no interest.
B. is a stream of payments that varies with current market interest rates.
C. is a level s
Chapter 01 - Introduction to Corporate Finance
57. The three parts of the Du Pont identity can be generally described as:
I. operating efficiency, asset use efficiency and firm profitability.
II. fina
Chapter 01 - Introduction to Corporate Finance
57. Today, you are retiring. You have a total of $413,926 in your retirement savings and have
the funds invested such that you expect to earn an average
103. John's Auto Repair just took out a $52,000, 10-year, 8 percent, interest-only
loan from the bank. Payments are made annually. What is the amount of the
loan payment in year 10?
A. $7,120
B. $8,85
Chapter 01 - Introduction to Corporate Finance
3.
An annuity stream where the payments occur forever is called a(n):
A. annuity due.
B. indemnity.
C. perpetuity.
D. amortized cash flow stream.
E. amor
Chapter 01 - Introduction to Corporate Finance
106.You want to have $10,000 saved ten years from now. How much less do you have to
deposit today to reach this goal if you can earn 6% rather than 5% on
Chapter 01 - Introduction to Corporate Finance
116. A firm has days' sales in inventory of 105 days, an average collection period of 35 days, and
takes 42 days, on average, to pay its accounts payable
Chapter 01 - Introduction to Corporate Finance
85. Lee Sun's has sales of $3,000, total assets of $3,000, and a profit margin of 5%. The firm has a
total debt ratio of 60%. What is the return on equit
Chapter 01 - Introduction to Corporate Finance
10. You are considering two projects with the following cash flows:
Which of the following statements are true concerning these two projects?
I. Both pro
Chapter 01 - Introduction to Corporate Finance
24. Bradley Snapp has deposited $6,000 in a guaranteed investment account with a promised
rate of 6% compounded annually. He plans to leave it there for
Chapter 01 - Introduction to Corporate Finance
109. Moulton Incorporated has a 10% return on assets and a 20% dividend payout ratio. What is
the internal growth rate?
A. 8.2%
B. 8.7%
C. 9.4%
D. 10%
E.
Chapter 01 - Introduction to Corporate Finance
28. You are the beneficiary of a life insurance policy. The insurance company informs you that
you have two options for receiving the insurance proceeds.
112. You want to buy a new sports coupe for $41,750, and the finance office at the
dealership has quoted you an 8.6 percent APR loan compounded monthly for
48 months to buy the car. What is the effect
98.
City Bank wants to appear competitive based on quoted loan rates and thus
must offer a 7.75 percent annual percentage rate on its loans. What is the
maximum rate the bank can actually earn based o
Running head: FINAL RATIO ANALYSIS
1
Final Ratio Analysis
Financial Statement Analysis
I.
Explaining Business Objectives and the Effect of the Objectives on the Ratios
Both AMD and Intel had understan
Note: The difference = 0.1 $24,829 = $2,483
AACSB: Analytic
Blooms: Analyze
Difficulty: 2 Medium
Learning Objective: 06-01 How to determine the future and present value of investments with multiple ca
Difficulty: 1 Easy
Learning Objective: 06-02 How loan payments are calculated and how to find the interest rate on a loan.
Section: 6.2
Topic: Annuity present value
29.
Your employer contributes $50 a
Section: 6.2
Topic: Interest rate
63.
Today, you turn 23. Your birthday wish is that you will be a millionaire by your
40th birthday. In an attempt to reach this goal, you decide to save $75 a day,
ev
Option A has a present value of $90,514.16 at 7.5 percent.
Option B has a present value of $85,255.68 at 7.5 percent.
Option C has a present value of $100,000.
Option C is the best choice since it has
24.
You need $25,000 today and have decided to take out a loan at 7 percent for
five years. Which one of the following loans would be the least expensive?
Assume all loans require monthly payments and
83.
A preferred stock pays an annual dividend of $3.20. What is one share of this
stock worth today if the rate of return is 11.75 percent?
A. $23.48
B. $25.00
C. $27.23
D. $33.80
E. $35.55
AACSB: Ana
46.
You are buying a previously owned car today at a price of $3,500. You are
paying $300 down in cash and financing the balance for 36 months at 8.5
percent. What is the amount of each loan payment?
Section: 6.2
Topic: Amortized loan
108. 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 fir
78.
You plan on saving $5,200 this year, nothing next year, and $7,500 the
following year. You will deposit these amounts into your investment account at
the end of each year. What will your investmen