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Question 1;1.;You plan to retire with \$750,000 in 20 years. How much should you deposit each month;into an account that pays 9.0% annual rate compounded monthly? (Note: Compounding;frequency is the same as the deposit frequency.);A. \$ 811;B. \$ 988;C. \$ 925;D. \$ 1,053;E. \$ 1,123;F. \$ 1,196;G. \$ 866;H. \$ 1,273;6 points;Question 2;1.;(Note: This is a challenging question. Please attempt in the end.) Regina Silva is planning;for her retirement 25 years from now. She expects to live for 34 years after retirement. On;the day she retires, she would like to purchase a condominium in Florida for \$500,000.;Starting one month after her retirement, she would like to withdraw \$7,000 per month;from her retirement account for the next seventeen years, and then increase the monthly;amount to \$8,000 per month for the remaining seventeen years. At the time she passes on;she would like to leave \$500,000 for charity. Finally, she would also like to see the;Olympics in Reo de Janeiro ten years from now. She expects that this trip will cost;\$7,500. She would like to make equal monthly deposits into her retirement account to;accomplish these objectives. She can earn 8.25 percent compounded monthly. Assume all;cash flows occur at the end of the month.;A. \$ 1,084;B. \$ 1,222;C. \$ 1,463;D. \$ 1,021;E. \$ 1,554;F. \$ 1,297;G. \$ 1,151;H. \$ 1,377;6 points;Question 3;1.;How long will it take for \$1,000 to grow to \$3,000 at a rate of 16 percent compounded;monthly?;A. 5.83 years;B. 6.69 years;C. 6.91 years;D. 7.35 years;E. 6.32 years;F. 6.17 years;G. 8.21 years;H. 7.67 years;6 points;Question 4;1.;Sungsam Company has total assets of \$200,000 and total debt of \$60,000. If it has 65,000;shares outstanding, what is the book value per share?;A. \$ 4.67;B. \$ 4.00;C. \$ 2.80;D. \$ 2.55;E. \$ 2.15;F. \$ 2.33;G. \$ 3.11;H. \$ 3.50;6 points;Question 5;1.;Lowell Corporation has a dividend payout ratio of 25 percent and a sustainable growth;rate of 10 percent. What is the company?s return on equity (ROE)?;A. 0.24;B. 0.20;C. 0.18;D. 0.16;E. 0.14;F. 0.12;G. 0.26;H. 0.22;6 points;Question 6;1.;You just won the lottery! You wish to put enough money away so that you can withdraw;\$6,000 per month for 15 years. You can earn 9% rate on any funds you deposit. How;much will you have to deposit now to meet your goal? (Note: Compounding matches the;withdrawal frequency.);A. \$ 745,691;B. \$ 473,650;C. \$ 714,970;D. \$ 777,845;E. \$ 591,560;F. \$ 765,313;G. \$ 785,850;H. \$ 666,870;6 points;Question 7;1.;You purchased a house for \$375,000 with twenty percent down payment and finance the;balance with a 30-year mortgage. Your monthly mortgage payment is \$2,600. What is the;effective annual rate of interest on the loan?;A. 7.53%;B. 6.99%;C. 10.31%;D. 11.22%;E. 8.12%;F. 8.77%;G. 9.50%;H. 12.27%;6 points;Question 8;1.;An investment offers to pay you \$15,000 per quarter for the next 10 years (The payments;start a quarter after you purchase the investment). If the interest rate is 12%, how much;should you pay for this investment?;A. \$ 346,722;B. \$ 554,755;C. \$ 522,754;D. \$ 453,053;E. \$ 592,454;F. \$ 416,066;G. \$ 485,410;H. \$ 383,353;6 points;Question 9;1.;You are planning to retire in 15 years with \$750,000. You can earn 9.0% compounded;quarterly. How much do you need to invest today?;A. \$ 228,587;B. \$ 147,283;C. \$ 181,396;D. \$ 197,361;E. \$ 156,323;F. \$ 210,517;G. \$ 170,463;H. \$ 244,343;6 points;Question 10;1.;The nominal rate of return on a risky security is 6.5 percent, and the same time the rate of;return on a security with no risk is 4.3 percent. What is the risk premium?;A. 3.55%;B. 3.35%;C. 4.85%;D. 2.59%;E. 3.85%;F. 3.07%;G. 4.35%;H. 2.11%;6 points;Question 11;1.;What is the total future value of the following set of cash flows at 8% rate?;Year;1;Cash Flow ?\$1300;A.;B.;C.;D.;2;\$1300;\$ (478);\$ (597);\$ (660);\$ (726);3;?\$1300;4;\$1300;5;?\$1,300;6;\$1300;E.;F.;G.;H.;\$ (794);\$ (421);\$ (367);\$ (536);6 points;Question 12;1.;Last year, Parking Corporation had net sales of \$3,050,000 and cost of goods sold of;\$1,800,000. Its depreciation charge was \$600,000 and selling, general, and administrative;expense was \$800,000. If the interest charge was \$35,000 and the tax rate is 30 percent;what was the operating cash flow? Ignore any carry back or carry forward of loss for tax;purposes.;A. 400,000;B. 450,000;C. 100,000;D. 150,000;E. 350,000;F. 300,000;G. 200,000;H. 250,000;6 points;Question 13;1.;The Hoola Hoop Company has current assets of \$200,000. If the current ratio is 2.0 and;the quick ratio is 1.40, what is the value of inventory?;A. 65,000;B. 60,000;C. 90,000;D. 55,000;E. 80,000;F. 85,000;G. 75,000;H. 70,000;6 points;Question 14;1.;Student House of Pizza had net sales of \$425,000 last year. Its cost of goods sold was;\$120,000 and Selling, General and Administrative Expense was \$80,000 and interest was;\$1,430. It has 50,000 shares outstanding. It added \$35,000 to retained earnings after;paying a dividend of \$1.75 per share. If the company?s tax rate is 30 percent, what was;the depreciation charge?;A. 12,856;B. 34,284;C. 55,713;D. 27,141;E. 48,570;F. 62,856;G. 41,427;H. 19,999;6 points;Question 15;1.;The nominal rate of return on a risky security is 8.16 percent, and the rate of return on;risk-free securities is 4 percent. What is the inflation rate if the pure rate is 3 percent?;A. 1.6537%;B. 1.5534%;C. 1.3592%;D. 0.9709%;E. 0.8721%;F. 1.2621%;G. 1.1650%;H. 2.0468%;6 points;Question 16;1.;Leveraged Corporation has a total debt to assets ratio of 85 percent. Its net income last;year was \$20,000. If the total debt was \$160,000, what was the return on equity?;A. 70.8%;B. 29.2%;C. 50.0%;D. 23.2%;E. 37.5%;F. 12.5%;G. 15.3%;H. 18.8%;6 points;Question 17;1.;Riverhawk Sports has return on equity of 19 percent, profit margin of 12.5 percent, sales;to assets ratio of 1.18. What is the company?s debt to equity ratio?;A. 24.2%;B. 29.2%;C. 11.4%;D. 15.4%;E. 34.6%;F. 46.8%;G. 40.4%;H. 19.6%;6 points

Paper#30858 | Written in 18-Jul-2015

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