Her cash time period isa answer ddiff aacsb

A) make business decisions.

B) compare cash flows of different projects.

Diff: 2

AACSB: 3. Analytic thinking

2) The time value of money is created by

A) the existence of profitable investment alternatives and interest rates.

Diff: 2

AACSB: 3. Analytic thinking

3) Which of the following statements is FALSE?

A) A dollar received one year from now will be worth more than a dollar received today.

Diff: 2

AACSB: 3. Analytic thinking

4) An investor will invest $1,000 now and expect to receive $10 for each of the next 10 years plus $1,000 at the end of the 10th year. Her cash flow at time period 0 is

A) $1,000

Diff: 2

AACSB: 3. Analytic thinking

5) An investor will invest $1,000 now and expect to receive $10 for each of the next 10 years plus $1,000 at the end of the 10th year. Her cash at time period 10 is

A) $10

Diff: 2

AACSB: 3. Analytic thinking

6) Should you prefer to receive $100,000 right now or $10,000 at the end of each of the next 12 years?

A) $100,000 now

Diff: 2

AACSB: 3. Analytic thinking

7) Money has a greater time value time value

A) when rates of return are higher.

Diff: 2

AACSB: 3. Analytic thinking

8) A diagram for visualizing future cash flows is known as

A) a future value vector.

Diff: 2

AACSB: 3. Analytic thinking

9) On timeline, the present is represented as

A) time sub n

Diff: 2

AACSB: 3. Analytic thinking

10) A timeline typically represents cash flows as an exponential growth curve.

Answer: FALSE

Keywords: time value of money

Principles: Principle 1: Money Has a Time Value

Question Status: New question

Objective: 5.1 Construct cash flow timelines to organize your analysis of problems involving the time value of money.

Diff: 2

AACSB: 3. Analytic thinking

13) The end of one time period and the beginning of the next occupy the same place on a timeline.

Answer: TRUE

Keywords: time value of money

Principles: Principle 1: Money Has a Time Value

Question Status: New question

Objective: 5.1 Construct cash flow timelines to organize your analysis of problems involving the time value of money.

Diff: 2

AACSB: 3. Analytic thinking

16) The last amount shown on a timeline represents the future value of all amounts invested up to that point.

Answer: FALSE

Keywords: time value of money

Principles: Principle 1: Money Has a Time Value

Question Status: Previous edition

Objective: 5.1 Construct cash flow timelines to organize your analysis of problems involving the time value of money.

_0__________1__________2_________3__________4

-$20,000 $25,000

Keywords: time value of money

Principles: Principle 1: Money Has a Time Value

C) FVn = P/(1 + i)n

D) FVn = P(1 + i)-n

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) 9 years

D) 12 years

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) 7%

D) 8%

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) original amount invested.

D) both A and B.

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) $1,764

D) $1,283

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) $38,720

D) $34,310

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) $71

D) $57

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) $828

D) $1,176

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) $634

D) $645

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) 500(1 + .02)5

D) 500(1 + .02)20

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) $1,038

D) $808

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) 77 months

D) 79 months

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) 10,000/(1 + .06)10

D) 10,000/(1 + .006)120

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) 9.8%

D) 10.6%

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) $1,110

D) $1,140

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) $66

D) $71

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) $187

D) $179

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

C) $880

D) $860

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

A) $2,800

B) $3,100

AACSB: 3. Analytic thinking

Question Status: Previous edition

A) $3,100

B) $3,188

AACSB: 3. Analytic thinking

Question Status: Previous edition

A) 17

B) 19

AACSB: 3. Analytic thinking

Question Status: Previous edition

A) 47%

B) 4.7%

AACSB: 3. Analytic thinking

Question Status: Previous edition

A) $7,401

B) $5,523

AACSB: 3. Analytic thinking

Question Status: Previous edition

A) 1,560,000

B) 2,220,366

AACSB: 3. Analytic thinking

Question Status: Previous edition

A) 8 years

B) 10 years

AACSB: 3. Analytic thinking

Question Status: Previous edition

A) N=4, i=.03, PV=-200, PMT=0, solve for FV

B) N=4, i=3, PV=-200, PMT=0, solve for FV

AACSB: 3. Analytic thinking

Question Status: New question

A) increases as the compound rate decreases.

B) decreases as the compound rate increases.

AACSB: 3. Analytic thinking

Question Status: Revised

A) N=16, i=.005, PV=200, PMT=0, solve for FV

B) N=4, i=.5, PV=200, PMT=0, solve for FV

AACSB: 3. Analytic thinking

Question Status: New question

A) =FV(7.5,18,0,-1,000)

B) =PV(.075,18,0,-1,000)

AACSB: 3. Analytic thinking

Question Status: New question

A) N=16, i=.005, PV=-200, PMT=0, solve for FV

B) N=4, i=.5, PV=$200, PMT=0, solve for FV

AACSB: 3. Analytic thinking

Question Status: New question

A) 83%

B) 75%

Diff: 2

AACSB: 3. Analytic thinking

32) At 8%, compounded annually, how long will it take $750 to double?

A) 9 years

Answer: A

Diff: 1

Principles: Principle 1: Money Has a Time Value

33) The future value of a lump sum deposited today increases as the number of years of compounding at a positive rate of interest declines.

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

AACSB: 3. Analytic thinking

Question Status: Previous edition

Answer: TRUE

Diff: 1

Principles: Principle 1: Money Has a Time Value

36) When performing time value of money computations with a financial calculator or EXCEL, PV and FV must have opposite signs.

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

AACSB: 3. Analytic thinking

Question Status: Previous edition

Answer: Non-annual compounding is preferable to annual compounding because with non-annual compounding, interest is compounded more frequently within a year period. This means that more interest on interest would be generated on a given investment.

Diff: 1

Principles: Principle 1: Money Has a Time Value

39) If you deposit $1,000 each year in a savings account earning 4%, compounded annually, how much will you have in 10 years?

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

i = 14%

Diff: 2

Principles: Principle 1: Money Has a Time Value

41) Earnings per share for XYZ, Inc. grew constantly from $7.99 in 1974 to $12.68 in 1980. What was the compound annual growth rate in earnings-per-share over the period?

AACSB: 3. Analytic thinking

Question Status: Previous edition

Answer: $6,185 = $450 FVIF[? %, 20 yr]

13.743 = FVIF[? %, 20 yr]

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

Keywords: future value

B) is generally larger than the future sum.

C) depends upon the number of discount periods.

Question Status: Previous edition

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) the investment with large cash flow late.

C) the investment with even cash flow.

Question Status: Previous edition

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) both long-term and short-term investments.

C) long-term investments.

Question Status: New question

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) the original amount invested

C) the number of periods

Question Status: Revised

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) $3,106

C) $429

Question Status: Previous edition

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) $11,574

C) $9,210

Question Status: Previous edition

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) $900

C) $1,866

Question Status: Previous edition

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) $570

C) $650

Question Status: Previous edition

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) FVn = (1 + i)/P

C) FVn = P/(1 + i)n

Question Status: Previous edition

Objective: 5.2 Understand compounding and calculate the future value of cash flows using mathematical formulas, a financial calculator, and an EXCEL spreadsheet.

B) the investment is discounted for fewer years.

C) the investment is discounted at a lower interest rate.

Question Status: New question

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) N=20, i=8,PMT = 0, FV=1000 solve for PMT

C) N=20, i=.08,PMT = 0, PV=1000 solve for FV

Question Status: New question

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) Approximately four years

C) Approximately six years

Question Status: Previous edition

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) i=5, PV=1, PMT = 0, FV=3, solve for N

C) i=.05, PV=-1, PMT = 0, FV=3, solve for N

Question Status: New question

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) 16.67%

C) 15.00%

Question Status: New question

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) =rate(25,0,100,1500)

C) =rate(25,0,-100,1500)

Question Status: New question

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) $248.40.

C) $313.60.

Question Status: Previous edition

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) $784.

C) $614.

Question Status: Previous edition

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) $675.30

C) $775.40

Question Status: Previous edition

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

B) decreases as the discount rate decreases.

C) increases as the number of discount periods increases.

AACSB: 3. Analytic thinking

Question Status: Previous edition

Answer: FALSE

Diff: 2

Principles: Principle 1: Money Has a Time Value

21) As the compound interest rate increases, the present value of future cash flows decreases.

Objective: 5.3 Understand discounting and calculate the present value of cash flows using mathematical formulas, a financial calculator, and an Excel spreadsheet.

Keywords: present value

AACSB: 3. Analytic thinking

Question Status: Previous edition

Answer: TRUE

Diff: 2

Principles: Principle 1: Money Has a Time Value

5.4 Making Interest Rates Comparable

D) 8.5% compounded daily

Answer: A

Keywords: effective annual rate

Principles: Principle 1: Money Has a Time Value

D) both A and C

E) all of the above

Objective: 5.4 Understand how interest rates are quoted and know how to make them comparable.

Keywords: effective annual rate

C) 10.9%

D) 6.1%

Objective: 5.4 Understand how interest rates are quoted and know how to make them comparable.

Keywords: effective annual rate

C) 10.38%

D) 10.125%

Objective: 5.4 Understand how interest rates are quoted and know how to make them comparable.

Keywords: effective annual rate

C) Interest rate per period / compounding periods per year

D) 1+quoted annual rate/compounding periods per year)1/compounding periods per year-1

Objective: 5.4 Understand how interest rates are quoted and know how to make them comparable.

Keywords: effective annual rate

AACSB: 3. Analytic thinking

Question Status: New question

Answer: FALSE

Diff: 2

Principles: Principle 1: Money Has a Time Value

8) A monthly credit card interest rate of 1.5% is equal to and effective annual rate of 19.56%

Objective: 5.4 Understand how interest rates are quoted and know how to make them comparable.

Keywords: effective annual rate

AACSB: 3. Analytic thinking

Question Status: Revised