Question 1

An annuity that pays $12,500 a year at an annual interest rate of 5.45 percent costs $150,000 today. What is the length of the annuity time period?

Accepted Answer

A)  25 years 
B)  18 years 
C)  15 years 
D)  20 years 
E)  22 years 
A)  25 years 
B)  18 years 
C)  15 years 
D)  20 years 
E)  22 years

Question 2

You want to start a business that you believe can produce cash flows of $5,600, $48,200, and $125,000 at the end of each of the next three years, respectively. At the end of three years you think you can sell the business for $250,000. At a discount rate of 16 percent, what is this business worth today?

Accepted Answer

A)  $258,803.02 
B)  $314,011.33 
C)  $280,894.67 
D)  $325,837.81 
E)  $297,077.17 
A)  $258,803.02 
B)  $314,011.33 
C)  $280,894.67 
D)  $325,837.81 
E)  $297,077.17

Question 3

Al obtained a mortgage of $195,000 at 5.25 percent for 15 years. How much of the second monthly payment is applied to interest?

Accepted Answer

A)  $850.00 
B)  $852.09 
C)  $849.16 
D)  $853.13 
E)  $848.08 
A)  $850.00 
B)  $852.09 
C)  $849.16 
D)  $853.13 
E)  $848.08

Question 4

What is the EAR of 18.9 percent compounded continuously?

Accepted Answer

A)  19.06 percent 
B)  20.80 percent 
C)  19.43 percent 
D)  19.89 percent 
E)  21.38 percent 
A)  19.06 percent 
B)  20.80 percent 
C)  19.43 percent 
D)  19.89 percent 
E)  21.38 percent

Question 5

Jogging Gear is considering a project with an initial cash requirement of $238,400. The project will yield cash flows of $4,930 monthly for 65 months. What is the rate of return on this project?

Accepted Answer

A)  9.97 percent 
B)  11.38 percent 
C)  14.28 percent 
D)  13.41 percent 
E)  10.56 percent 
A)  9.97 percent 
B)  11.38 percent 
C)  14.28 percent 
D)  13.41 percent 
E)  10.56 percent

An annuity that pays $12,500 a year at an annual interest rate of 5.45 percent costs $150,000 today. What is the length of the annuity time period?

Al obtained a mortgage of $195,000 at 5.25 percent for 15 years. How much of the second monthly payment is applied to interest?

What is the EAR of 18.9 percent compounded continuously?

Jogging Gear is considering a project with an initial cash requirement of $238,400. The project will yield cash flows of $4,930 monthly for 65 months. What is the rate of return on this project?

Introduction to Corporate Finance

Financial Statements, Taxes, and Cash Flow

Working with Financial Statements

Long-Term Financial Planning and Growth

Introduction to Valuation: The Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Project Analysis and Evaluation

Some Lessons from Capital Market History

Return, Risk, and the Security Market Line

Cost of Capital

Raising Capital

Financial Leverage and Capital Structure Policy

Dividends and Payout Policy

Short Term Finance and Planning

Cash and Liquidity Management

Credit and Inventory Management

International Corporate Finance

Behavioral Finance: Implications for Financial Management

Enterprise Risk Management

Options and Corporate Finance

Option Valuation

Mergers and Acquisitions

Leasing

Filters

Exam 6: Discounted Cash Flow Valuation

An annuity that pays $12,500 a year at an annual interest rate of 5.45 percent costs $150,000 today. What is the length of the annuity time period?

Al obtained a mortgage of $195,000 at 5.25 percent for 15 years. How much of the second monthly payment is applied to interest?

What is the EAR of 18.9 percent compounded continuously?

Jogging Gear is considering a project with an initial cash requirement of $238,400. The project will yield cash flows of $4,930 monthly for 65 months. What is the rate of return on this project?

Introduction to Corporate Finance

Financial Statements, Taxes, and Cash Flow

Working with Financial Statements

Long-Term Financial Planning and Growth

Introduction to Valuation: The Time Value of Money

Interest Rates and Bond Valuation

Stock Valuation

Net Present Value and Other Investment Criteria

Making Capital Investment Decisions

Project Analysis and Evaluation

Some Lessons from Capital Market History

Return, Risk, and the Security Market Line

Cost of Capital

Raising Capital

Financial Leverage and Capital Structure Policy

Dividends and Payout Policy

Short Term Finance and Planning

Cash and Liquidity Management

Credit and Inventory Management

International Corporate Finance

Behavioral Finance: Implications for Financial Management

Enterprise Risk Management

Options and Corporate Finance

Option Valuation

Mergers and Acquisitions

Leasing

Filters