QUESTION 5

1. Explain at least 2 different types of Depository Institutions, and explain how they differ.

QUESTION 6

1. (a) If an investment promises a single cash flow of $25,000 in 25 years and the interest rate is 7%, what is the maximum price one should pay for the investment?

   (b) If you could buy this investment for $2500 would you? Why or why not?

   (c) If you could buy this investment for $4500 would you? Why or why not?

10 points

QUESTION 7

1. If you deposit $8,000 into a Money market account today, which pays 5% interest compounded quarterly, how much money will be in the account in 40 years when you retire?

QUESTION 8

Identify at least 3 different types of Financial Statements, and explain what type of information is shown on each.

QUESTION 9

1. In 1-2 paragraphs, explain the role that finance plays in an organization today, identifying some core functions and competencies.

QUESTION 10

1. Explain a real world example how a firm may use Future Value and Present Value as part of their decision making.