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