1 $5,000.00 deposited in an account earning 6.5%, for 8 years. Calculate the balance in 8 years.

a. 8,274.98

b. 8,752.83

c. 8,917.39

d 9,235.36

A firm has net sales of $5,700,000, Cost of Goods Sold $3,500,000, Depreciation Expense of $300,000, Selling and Administrative Expenses of $500,000, Interest Expense of $200,000, and an average tax rate of 20%.

2 The firm's Net Income is

a. 400,000

b. 720,000

c. 800,000

d 960,000

3 The firm's Operating Margin is

a. 17.8%

b. 21.8%

c. 24.6%

d 26.9%

4 The firm's Gross Profit Margin is

a. 32.0%

b. 34.2%

c. 36.4%

d 38.6%

5 The firm's Pre-taxable Income is

a. 1,200,000

b. 1,000,000

c. 800,000

d 500,000

e cannot be determined

6 $8,000.00 deposited in an account earning 10.26%, for 8 years. Calculate the future value

a. 16,925.35

b. 17,535.27

c. 17,475.67

d 17,937.39

7 $8,000.00 deposited in an account earning 10.26% (compounded semi-annually), for 8 years.

Calculate the future value

a. 16,816.31

b. 16,932.55

c. 17,535.27

d 17,812.16

e 18,306.44

8 $8,000.00 deposited in an account earning 10.26% (compounded monthly), for 8 years.

Calculate the future value

a. 18,706.32

b. 18,639.89

c. 18,525.52

d 18,115.22

9 $7,500 deposited in an account earning 6.58%, for 10 years (compounded weekly).

Calculate the balance in ten years

a. 14,113.38

b. 14,308.25

c. 14,404.86

d 14,475.93

10 $7,500 to be received seven (7) years from today, discounted at 5%. Calculate the present value

Calculate the balance in ten years

a. 5,355.55

b. 5,343.25

c. 5,330.11

d 5,325.36

11 Frank will need $7,500 in seven years (7). How much should Frank deposit in an account today, earning 6%, compounded semi-annually. Calculate present or discounted value of $7,500

a. 4,999.99

b. 4,987.93

c. 4,965.35

d 4,958.38

12 $5,000.00 deposited in an account earning 8.5%, for 10 years compounded monthly. Calculate the interest factor

a. 2.5019

b. 2.4259

c. 2.2609

d 2.2401

e 2.33265

13 $5,000.00 deposited in an account, every year for the next ten years, earning 8.5%, for 10 years.

Calculate the future value of an annuity

a. 74,180.35

b. 74,175.49

c. 74,168.35

d 74,162.22

e 74,158.25

14 Let's say Biagio deposits $15,550 dollars in a CD (Certificate of Deposit) at Star Bank. The bank is offering to pay 6.75% interest for 5 years. What will be the balance in

Ken's account five years from today.

a. 19,592.32

b. 20,000.00

c. 20,321.25

d 21,556.08

15 If a firm has a gross profit of $1,000,000, selling and administrative expenses of $500,000, depreciation of $100,000, and interest expense of $200,000, calculate its operating profit

a. 200,000

b. 250,000

c. 325,000

d 400,000

16 Ganley Ford offers to sell your company a new Lincoln Navigator at factory list price, (Hybrid

conversion kit included) and, of course, outstanding financing. The list price is

$54,325 . The special rate is 6.13%. Calculate monthly payments on this 5 year loan.

a. 1053.54

b. 1052.22 Solve for Payment - Present Value of Annuity

c 1,049.66 Monthly compoundin g

d 1,048.73

17 Let's say Biagio deposits $15,550 dollars in a CD (Certificate of Deposit) at Star Bank.

The bank is offering to pay 5.25% interest for 5 years. What will be the balance in

Biagio's account five years from today. Compounded semi-annually.

a. 19,591.22

b. 20,000.00 Solve for Future Val ue (with compounding)

c. 20,149.40

d 21,557.13

18 The value of any asset is

a. the future value of all current cash flows This is called fundamental of Classical

b. what the highest bidder is willing to pay for it Valuation - Applies to Stocks, Bonds and Capital

c. the current market price Budgeting

d the discounted value of all expected cash flows

19 Let's say Karrin opens up an account with Vanguard Investments in a stock-mutual fund. The fund is attractive to her because it promises 7.62% return for the life of the account. Karrin plans to deposit $7,000 dollars a year, beginning one year from today for the next twenty years.

What will be the balance in her account when she goes to withdraw in twenty years.

a. 307,163.98

b. 306,210.55 Future Value of an Annuity (ordinary annuity)

c. 305,323.31

d 304,311.10

20 Let's say Karrin opens up an account with Vanguard Investments in a stock-mutual fund. The fund is attractive to her because it promises 7.26% return for the life of the account. Karrin plans to deposit $7,000 dollars a year, beginning one year from today for the next twenty years.

What is the interest factor.

a. 42.18

b. 43.88 Future Value of an Annuity (Solve for Interest Factor)

c. 44.36 Hint - Calculate what's in formula brackets

d 45.37

21 Lloyd is estimating the growth rate of family insurance premiums. A family premium was $895

in 2003. Ten years later in 2013, the same family insurance premium was $1,850. Calculate the growth rate over this period.

a. 4.44%

b. 5.39% Solve for rate in a lump sum formula

c. 6.25% r = ((FV/PV) raised to 1/n) - 1

d 7.53%

The University of Arizona announces a new business college building will be completed in 2023.

The new building will cost 35 million dollars, payable upon completion in five years (2023).

How much money should the college set aside each year, for the next five years in an account

expected to earn 4.25%.

a. 6,429,746.33

b. 6,373,425.18 Future Value of an Annuity - Solve for Payment

c. 6,247,310.25

d 6,134,555.15

22 An investment portfolio generated the following returns over the last 5 years

2016

2017

2018

2019

2020

-12%

6%

9%

16%

28%

23 Calculate the portfolio's expected return for 2021 (arithmetic mean average)

a. 15.00%

b. 13.25% You can try this long-hand, or see your

c 12.08% calculator's manual - or YouTube

d 9.40% You'll see this again in Chapter 13 - Arithmetic Mean Average

24 Calculate the sample standard deviation for the portfolio

a. 14.66%

b. 13.11% You can try this long-hand, or see your

c 12.36% calculator's manual - or YouTube

d 9.36%

A firm has net sales of $15,000,000, Cost of Goods Sold $3,000,000, Depreciation Expense of $500,000, Selling and Administrative Expenses of $1,000,000, Interest Expense of $1,000,000, and an average tax rate of 25%.

25 The firm's Net Income is

a. 5,476,325

b. 5,625,325

c. 6,435,205

d 7,125,000

26 The firm's Operating Margin is

a. 70.0%

b. 66.0%

c. 62.5%

d 58.1%

27 A factory is expected to generate $3,000,000 per year every year for the next twelve years.

An interested investor uses a required rate (discount rate) of 11.25%. What is the intrinsic value of the factory to this investor. (solve for present value of an annuity)

a. 19,247,271.61

b. 19,133,220.55 Present Value of an Annuity

c. 18,976,457.88

d 18,865,311.09

28 An investment offers a perpetual cash flow of $50,000 per year. The return you require is 9%.

What is the value of this investment (perpetuity)

a. 222,222.22

b. 333,333.33 Perpetuity P = PMT/r

c. 444,444.44

d 555,555.55

29 Company A borrows $5,000,000 from Bank C. The loan terms call for Company A to pay the loan back over five (5) years. If Bank C lends the money to Company A for this five (5) year loan at 5%,

Calculate the annual payment

a. 1,154,874.00

b. 1,325,350.00 Present Value of an Annuity

c. 1,225,350.00 Solve for Payment

d 1,105,325.00

30 Refer to the previous question. Calculate the annual payment Company A is expected to pay in year three (3).

a. 163,325.25

b. 159,225.25

c. 157,250.42

d 152,252.25

32 The current ratio is classified as

a. a debt ratio

b. a utilization ratio

c. a liquidity ratio

d a profitability ratio

33 Let's say Biagio deposits $15,550 dollars in a CD (Certificate of Deposit) at Star Bank.

The bank is offering to pay 6.75% interest for 5 years. What will be the balance in

Ken's account five years from today.

a. 19,592.32

b. 20,000.00

c. 20,321.25

d 21,556.08

34 Lets say you deposit $300 per month, every month for the next 10 years, beginning

at the end of this month. You'll invest in a high risk stock fund that will pay 7.25%

What will be your balance when you go to retire in 10 years.

a. 66,210.00

b. 64,450.00

c. 57,310.25

d 52,646.02

35 $5,000.00 deposited in an account earning 9.35%, for 10 years, compounded daily. Calculate the future value.

a. 12,562.10

b. 12,575.36

c. 12,598.98

d 12,734.54

36 A mortgage loan is taken out for the amount of $250,000. It is a conventional mortgage loan,

thirty years, monthly payments. Then mortgage interest rate in 5.10%. Calculate the monthly payment

a. 1,128.19

b. 1,143.25

c. 1,194.49

d. 1,357.37

37 You will receive $5,000 per year, every year for the next five (5) years, beginning at the end of this year.

If you use 6% as your discount rate, calculate the present value of this annuity.

a. 21,061.80

b. 21,095.37

c. 21,137.33

d 21,166.67

38 Refer to the previous question: this is a(n)

a. back load annuity

b. front load annuity

c. annuity due

d ordinary annuity

39 Parker Corporation is planning to break ground on a new factory. The factory will require an initial cash

outlay of $5,000,000 which will be due in July 2023 (five years). How much will Parker need to deposit,

or set a-side every quarter, for the next 5 years (20 quarters), in an account that earns 9.35%, in order to have the

funds available for this outlay (investment).

a. 190,136.22

b. 194,303.22

c. 195,958.04

d 198,958.04

40 Let's say you own an apartment building that generates $50,000 a year in cash flows from rent, every year.

If you plan to sell the asset for $1,000,000 in ten years, what is the value (present value) of this asset

Use 6% as your discount rate

a. 1,250,631.00 Set this up as a compound question. Present value of a lump

b. 1,035,325.50 sum plus the present value of an annuity

c. 926,399.13

d 850,325.25

A 7% coupon rate bond makes annual interest rate payments. Par value is $1,000.

The bond matures in 10 years. The required rate of return is 6.5%. What is the current price

a. 850.34

b. 972.56

c. 1,035.94

d. 1,050.25

Answer rating: 100% (QA)

Lets go through each question and provide the correct answers 1 Question 1 Calculate the balance in 8 years with 5000 deposited at 65 Correct Answer b 875283 2 Question 2 Calculate the firms Net Incom... View the full answer