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##### finance homework mcq eco282

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Question;1. The;present value of $100 expected in two years from today at a discount rate of 6%;is;a. $116.64;b. $108.00;c. $100.00;D. $89.00;2. Present;Value is defined as;A. Future cash flows discounted to the present at an;appropriate discount rate;b. Inverse;of future cash flows;c. Present;cash flow compounded into the future;d. None of;the above;3. If the;interest rate is 12%, what is the 2- year discount factor? A. 0.7972;b. 0.8929;c. 1.2544;d. None of;the above;4. If the;present value of the cash flow X is $240, and the present value cash flow Y;$160, then the present value of the combined cash flow is;a. $240;b. $160;c. $80;D. $400;5. If the 2-year;discount factor is 0.64, what is the rate of interest (in APR)?;a. 10% B.;25%;c. 40%;d. None of;the above;6. What is;the present value of the following cash flow at a discount rate of 9%?;A. $372,431.81;b. $450,000;c. $405,950.68;d. None of;the above;7;7. At an;interest rate of 10%, which of the following cash flows should you prefer? Year;1 Year 2 Year 3;A. 500 300 100;b. 100 300;500;c. 300 300;300;d. Any of;the above as they all add up to $900;8. What is;the net present value of the following cash flow at a discount rate of 11%?;A. $69,108.03;b. $231,432.51;c. $80,000;d. None of;the above;9. What is;the present value of the following cash flow at a discount rate of 16% APR?;A. $136,741.97;b. $122,948.87;c. $158,620.69;d. None of;the above;10. What is;the net present value (NPV) of the following cash flows at a discount rate of;9%?;A. $122,431.81;b. $200,000;c. $155,950.68;d. None of;the above;11. A;perpetuity is defined as;a. Equal;cash flows at equal intervals of time for a specific number of periods;B. Equal cash flows at equal intervals of time forever;c. Unequal;cash flows at equal intervals of time forever;d. None of;the above;12. What is;the present value of $10,000 per year perpetuity at an interest rate of 10%?;a. $10,000;B. $100,000;c. $200,000;d. None of;the above;8;13. You would;like to have enough money saved to receive $100,000 per year perpetuity after;retirement so that you and your family can lead a good life. How much would you;need to save in your retirement fund to achieve this goal (assume that the;perpetuity payments start one year from the date of your retirement. The;interest rate is 12.5%)?;a. $1,000,000;b. $10,000,000;C. $800,000;d. None of;the above;14. You would;like to have enough money saved to receive $80,000 per year perpetuity after;retirement so that you and your family can lead a good life. How much would you;need to save in your retirement fund to achieve this goal (assume that the;perpetuity payments start one year from the date of your retirement. The;interest rate is 8%)?;a. $7,500,000;b. $750,000;C. $1,000,000;d. None of;the above;15. You would;like to have enough money saved to receive a $50,000 per year perpetuity after;retirement so that you and your family can lead a good life. How much would you;need to save in your retirement fund to achieve this goal (assume that the;perpetuity payments starts on the day of retirement. The interest rate is 8%)?;a. $1,000,000;B. $675,000;c. $625,000;d. None of;the above;16. You would;like to have enough money saved to receive an $80,000 per year perpetuity after;retirement so that you and your family can lead a good life. How much would you;need to save in your retirement fund to achieve this goal (assume that the;perpetuity payments starts on the day of retirement. The interest rate is 10%)?;a. $1,500,000;B. $880,000;c. $800,000;d. None of;the above;17. An annuity;is defined as;A. Equal cash flows at equal intervals of time for a;specified period of time;b. Equal;cash flows at equal intervals of time forever;c. Unequal;cash flows at equal intervals of time forever;d. None of;the above;9;18. If you receive $1,000 payment at the end each year for;the next five years, what type of cash flow do you have?;a. Uneven cash flow stream B. An annuity;c. An annuity due d. None of the above;19. If the three-year present value annuity factor is 2.673;and two-year present value annuity factor is 1.833, what is the present value;of $1 received at the end of the 3 years?;a. $1.1905 B. $0.84 c. $0.89;d. None of the above;20. If the five-year present value annuity factor is 3.60478;and four-year present value annuity factor is 3.03735, what is the present;value at the $1 received at the end of five years?;a. $0.63552 b. $1.76233 C. $0.56743;d. None of the above;21. What is the present value annuity factor at a discount;rate of 11% for 8 years? a. 5.7122;b. 11.8594 C. 5.1461;d. None of the above;22. What is the present value annuity factor at an interest;rate of 9% for 6 years? a. 7.5233;B. 4.4859 c. 1.6771;d. None of the above;23. What is the present value of $1000 per year annuity for;five years at an interest rate of 12%? a. $6,352.85;B. $3,604.78 c. $567.43;d. None of the above;24. What is the present value of $5000 per year annuity at a;discount rate of 10% for 6 years? a. $21,776.30;b. $3,371.91 C. $16,760.78;d. None of the above;10;25. After;retirement, you expect to live for 25 years. You would like to have $75,000;income each year. How much should you have saved in the retirement to receive;this income, if the interest is 9% per year (assume that the payments start on;the day of retirement)?;a. $736,693.47;B. $802,995.88;c. $2,043,750;d. None of;the above;26. After;retirement, you expect to live for 25 years. You would like to have $75,000;income each year. How much should you have saved in the retirement to receive;this income, if the interest is 9% per year (assume that the payments start one;years after the retirement)?;A. $736,693.47;b. $6,352,567.22;c. $1,875,000;d. None of;the above;27. For;$10,000 you can purchase a 5-year annuity that will pay $2504.57 per year for;five years. The payments are made at the end of each year. Calculate the;effective annual interest rate implied by this arrangement: (approximately);A. 8%;b. 9%;c. 10%;d. None of;the above;28. If the;present value annuity factor for 10 years at 10% interest rate is 6.1446, what;is the present value annuity factor for an equivalent annuity due?;a. 6.1446;b. 7.38;C. 6.759;d. None of;the above;29. If the;present annuity factor is 3.8896, what is the present value annuity factor for;an equivalent annuity due if the interest rate is 9%?;a. 3.5684;B. 4.2397;c. 3.8896;d. None of;the above;30. For;$10,000 you can purchase a 5-year annuity that will pay $2358.65 per year for;five years. The payments are made at the beginning of each year. Calculate the;effective annual interest rate implied by this arrangement: (approximately);a. 8%;B. 9%;c. 10%;d. None of;the above

Paper#48757 | Written in 18-Jul-2015

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