10/1/2012 CORPORATE FINANCE FIN 3313.01 Fall 2012 1st MID-TERM SINAN YILDIRIM NAME (Each Multiple choice question is worth 4 points) 1. The goal of financial management is to increase the: a. future value of the firm 's total equity. b. book value of equity. c. dividends paid per share. d. current market value per share. e. number of shares outstanding, thereby increasing the market value of equity. 2. A corporation: A. is ultimately controlled by its board of directors. B. is a legal entity separate from its owners. C. is prohibited from entering into contractual agreements. D. has its identity defined by its bylaws. E. has its existence regulated by the rules set forth in its charter. 3. …show more content…
C. must record all expenses when incurred. D. can still manipulate their earnings to some degree. E. record both income and expenses as soon as the amount for each can be ascertained. 13. Elaine has just received an insurance settlement of $25,000. She wants to save this money until her daughter goes to college. If she can earn an average of 6.5 percent, compounded annually, how much will she have saved when her daughter enters college 8 years from now? A. $38,000.00 B. $40,929.02 C. $41,374.89 D. $41,899.60 E. $42,000.00 14. Your parents spent $6,200 to buy 500 shares of stock in a new company 13 years ago. The stock has appreciated 9 percent per year on average. What is the current value of those 500 shares? A. $18,824.17 B. $19,007.99 C. $19,580.92 D. $20,515.08 E. $22,449.92 15. Six years from now, you will be inheriting $100,000. What is this inheritance worth to you today if you can earn 6.5 percent interest, compounded annually? A. $68,533.41 B. $70,008.21 C. $72,419.05 D. $72,798.47 E. $74,003.15 16. How long will it take to double your savings if you earn 3.6 percent interest, compounded annually? A. 17.78 years B. 18.04 years C. 18.67 years D. 19.42 years E. 19.60 years 17. You have been told that you need $21,600 today in order to have $100,000 when you retire 42 years from now. What rate of interest was used in the present value computation? Assume interest is
academic year interest rate of 3.76 percent would pay a 5,032 dollars interest over 10 years,
Beverly and Kyle Nelson currently insure their cars with separate companies paying $450 and $375 a year. If they insure both cars with the same company, they would save 10 percent on the annual premiums. What would be the future value of the annual savings over ten years based on an annual interest rate of 6 percent?
Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding.
d. List at least two non-discretionary expenses listed on the bank statement or check register. (1-2 sentences. 1.0
13. What is the formula for the Present Value (PV) for a finite stream of cash flows (1 per year) that lasts for 10 years?
b. If you inherited $100,000 today and invested all of it in a security that paid an 8% rate of return, how much would you have in 15 years?
The first step in mastering ICD-10-PCS is to become familiar with the terminology, structure and format of this new code set. In addition to the Flash Card software program found on the CD-ROM in the back of the text, AHIMA also offers a deck of ICD-10-PCS flashcards. These high quality flashcards will help you to learn all of the definitions. The full-color flashcards define the 31 Medical and Surgical Root Operations and the
a. What is the CD’s value at maturity (future value) if it pays 10 percent annual interest?
10. An investment of $1,000 today will grow to $1,100 in one year. What is the continuously compounded rate of return?
1. If Mrs. Beach wanted to invest a lump sum of money today to have $100,000 when she retired at 65 (she is 40 years old today) how much of a deposit would she have to make if the interest rate on the C.D. was 5%?
In question four, Janet was asked to solve a question that deals with annuity payments, specifically, ordinary annuities. It starts by asking of how much you will make if you add $2,000 every year and it is compounded by 10% interest every year. These, for the most part, are future value problems. The first one comes out to be a future value of $12,210.20, which does not satisfy the need for $20,000. The next part asks what the value would be if the interest was compounded semiannually. You have to do an equation in order to find out what the effective annual interest rate. Through this equation you come out with a value of 10.25% and after the calculator calculations you come out with a future value of $12,271.11, also not meeting the demand for that first year of college. The next part asks what payment will you need in order to get to that $20,000 number and the present value comes to be $3,275.95. Next, the case asks what original payment you would need in order
4. (TCO B) You want to buy a new sports car three years from now, and you plan to save $4,200 per year, beginning one year from today. You will deposit your savings in an account that pays 5.2% interest. How much will you have just after you make the third deposit, three years from now? (Points : 10)
1. James plans to fund his individual retirement account, beginning today, with 20 annual deposits of $2,000, which he will continue for the next 20 years. If he can earn an annual compound rate of 8 percent on his deposits, the amount in the account upon retirement will be 98845.84(since it is a retirement plan so, assumed to be annuity due) correct 91,523.93 – ordinary annuity in this accumulation phase.
Returning to the example above, you put 10 million in an account with compounding interest rate of 8% / year. After 10 years, how much money do you have? (including principal and interest)