Question 5
Your firm purchases a piece of property by buying it outright for $515,000. Historically, nearby property in the neighborhood has appreciated in value about 4% per year. Assuming you can rely on this historic appreciation what will the property be worth AT THE END OF 20 YEARS?
Question 6
In doing some retirement planning you determined that you want to save $25,000 each year until you retire. You plan to invest it in a 'guaranteed return mutual fund' which pays COMPOUND interest at 4% per year; you plan to keep it invested there until you retire in 30 years. WHAT WILL THE INVESTMENT BE WORTH THEN?
Question 7
Your firm must replace its packaging machine after its useful life of 10 years passes and depreciation can no longer be claimed on it. The estimated replacement cost is $5,550,123. How much must the company save (invest) each year at 2% to accumulate enough to replace the machine?
Question 8
You are offered two investments for the firmâs âretained earningsâ ($4,238,000). As CFO you are looking for good ways to invest the firmâs hard earned money. Which option will give you a better return on and of investment (two ROIs)?
Option 1 â pays out at 4% simple interest for five years
Option 2 â pays out at 2% compound interest for four years
Question 9
Increasing the number of periods could impact all of the following except
A â PV of an annuity
B â PV of $1
C â FV of $1
D â FV of an annuity
Your firm purchases a piece of property by buying it outright for $515,000. Historically, nearby property in the neighborhood has appreciated in value about 4% per year. Assuming you can rely on this historic appreciation what will the property be worth AT THE END OF 20 YEARS?
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| Question 6 | |||||
| In doing some retirement planning you determined that you want to save $25,000 each year until you retire. You plan to invest it in a 'guaranteed return mutual fund' which pays COMPOUND interest at 4% per year; you plan to keep it invested there until you retire in 30 years. WHAT WILL THE INVESTMENT BE WORTH THEN? | |||||
| Question 7 | ||||||||||||
| Your firm must replace its packaging machine after its useful life of 10 years passes and depreciation can no longer be claimed on it. The estimated replacement cost is $5,550,123. How much must the company save (invest) each year at 2% to accumulate enough to replace the machine? | ||||||||||||
| | ||||||||||||
| Question 8 | ||||||||||||||||
| You are offered two investments for the firmâs âretained earningsâ ($4,238,000). As CFO you are looking for good ways to invest the firmâs hard earned money. Which option will give you a better return on and of investment (two ROIs)? Option 1 â pays out at 4% simple interest for five years Option 2 â pays out at 2% compound interest for four years | ||||||||||||||||
| | ||||||||||||||||
| Question 9 | |||||
| Increasing the number of periods could impact all of the following except A â PV of an annuity B â PV of $1 C â FV of $1 D â FV of an annuity | |||||
Related questions
Will guarantee you a million dollars Financial prosperity in the future Both A and B Both A and C |
Accumulate funds for major expenditures Save for retirement Shelter their income from taxes All of the above |
Federal Reserve System National Association of Securities Dealers Securities and Exchange Commission Federal Securities Agency |
prospectus underwriting journal dealer newsletter None of these |
Municipal bonds issued by New York, Houston, and Chicago One-year, five-year, and ten-year certificates of deposit 100 shares of Wal-Mart stock, an IBM bond, and a two-year certificate of deposit |
Capital depreciation Dividends The ability to buy bonds |
Compound interest Variable interest Fixed interest |
A statement that shows how much you owe A plan to go into debt A plan to cover your losses |
The price the security is worth The price at which one can purchase a security None of these |
Asset Management Diversification Compounding None of these |
One of the basic rights of common stockholders is the right to control. This means that stockholders must be consulted on all decisions that the firm makes before the board of directors or management can make a decision.
| True |
| False |
Question 52
Choose the correct statement regarding ETFs. (This is a multiple answer format question which means you should check all that apply...there may be more than one correct response).
| The maximum contribution to an ETF is $5000 per person per year |
| ETFs refer to a tax-sheltered retirement plan |
| An ETF is a security that is structured like a mutual fund (each share represents a portfolio of securities), but trades like a stock (bought sold through a brokerage account on stock exchanges) |
Question 53
You want to accumulate $195153. You currently have $12470 saved. How much must you add at the end of each week for the next 11 years in order to reach your goal if you earn 8.56%?
Question 54
All else equal, we would expect the stock price to increase when ___. (This is a multiple answer format question which means you should check all that apply...there may be more than one correct response).
| The required return decreases |
| The riskiness of the stock decreases |
| The expected growth rate increases |
Question 55
All else equal, an increase in the riskiness of a firm will cause the cost of capital to rise.
| True |
| False |
Question 56
You plan to retire in 5 years. At the point of retirement, you want to be able to withdraw $100,000 and then withdraw $80,000 at the end of each year forever. Assume that you earn a 7% rate of return and do not want to make any further contributions to your retirement fund, how much do you need today?
| There is not enough information to answer this question |
| $886,139.96 |
| $1,142,857.14 |
| None of these answers are correct |
| $871,880.24 |
Question 57
A bond indenture refers to a bond with a AA bond rating are higher.
| True |
| False |
Question 58
Which of the following is likely to lead to a weaker US dollar (all else equal)? (This is a multiple answer format question which means you should check all that apply...there may be more than one correct response).
| Interest rates in the US go up relative to global interest rates |
| Interest rates in the US go down relative to global interest rates |
| US imports increase relative to US exports |
Question 59
You are offered the opportunity to purchase a 7% coupon bond with 12 years remaining until maturity for $1105.26. Based on this, the Yield-to-Maturity for this bond is
| 7.52% |
| 4.95% |
| 5.77% |
| There is no solution |
| 14.31% |
Question 60
Stock A has an expected return of 8.4% and a standard deviation of 51.33%. Stock B has an expected return of 10.1% and a standard deviation of 40.11%. Assuming all investors must choose between these two stocks, we would expect Stock A to decrease in value and Stock B to increase in value until the expected return for Stock A rises above the expected return of Stock B.
| True |
| False |
Question 61
When comparing two individual investments to be held as stand-alone investments (not as part of a well diversified portfolio), standard deviation is a better risk measurement than beta.
| True |
| False |
