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##### Given the following cash flows, calculate the payback period...

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Question;Question 1;Given the following cash flows, calculate the;payback period;Year;CF;0;-921;1;368;2;253;3;291;4;784;a.;3.0115;b.;3;c.;2.0125;d.;4.5209;1 points;Question 2;A bond is currently selling for \$1,087. If the;yield to maturity is 10%, the coupon rate will be;a.;less than 10%.;b.;equal than 10%.;c.;more than 10%.;d.;None above;1 points;Question 3;A bond that sells for less than face value is;called as;a.;discount bond;b.;premium bond;c.;par value bond;d.;debenture;e.;perpetuity;1 points;Question 4;Suppose the real rate is 9.83% and the inflation;rate is 4.65%. Solve for the nominal rate.;a.;11.32%;b.;12.87%;c.;14.93%;d.;21.74%;e. 14.48;1 points;Question 5;The ABC Co. has \$1,000 face value bond;outstanding with a market price of \$937.6. The bond pays interest annually;matures in 9 years, and has a yield to maturity of 10.7 percent. What is the;current yield?;a.;5.11%;b.;10.22%;c.;7.34%;d.;14.94%;1 points;Question 6;What is the net present value of the following;cash flows? Assume an interest rate of 3.5%;Year;CF;0;-\$11,895;1;\$7,722;2;\$5,687;3;\$5,120;a.;\$5,492.69;b.;\$17,387.92;c.;\$6,247.34;d.;\$8,235.81;1 points;Question 7;Suppose an investment offers to double your;money in 39 years. What annual rate of return are you being offered if interest;is compounded semi-annually?;a.;1.79%;b.;1.56%;c.;0.98%;d.;0.89%;1 points;Question 8;A 8.9 percent \$1,000 bond matures in 17 years;pays interest semiannually, and has a yield to maturity of 16.02 percent. What;is the current market price of the bond?;a.;\$587.92;b.;\$456.23;c.;\$143.24;d.;\$693.22;1 points;Question 9;A cost that has already been incurred and cannot;be recouped is called as a(n);a.;sunk cost;b.;financial cost;c.;opportunity cost;d.;side cost;e.;relevant cost;1 points;Question 10;A project has the following cash flows. What is;the internal rate of return?;Year 0 1 2 3;Cash flow -\$121,000 68,150 \$42,200 \$39,100;a.;12.71%;b.;14.39%;c.;13.47%;d.;13.85%;e.;14.82%;1 points;Question 11;Uptown Insurance offers an annuity due with;semi-annual payments for 19 years at 4.9 percent interest. The annuity costs;\$176,239 today. What is the amount of each annuity payment?;a.;\$7,008.06;b.;\$5,670.26;c.;\$8,300.23;d.;\$4,607.98;1 points;Question 12;ABC Corp. just paid a dividend of \$2.4 per share;at the end of the year. The stock has a required rate of return is 18%. The dividend;is expected to grow at 6.9%. What is dividend at time = 8? (solve for D8?);a.;\$7.667;b.;\$3.175;c.;\$6.451;d.;\$4.093;1 points;Question 13;The principal amount of a bond that is repaid at;the end of term is called the par value or the;a.;call premium;b.;perpetuity value;c.;face value;d.;back-end value;e.;coupon value;1 points;Question 14;How many years will it take to quadruple (i.e. 4;times) your money at 9% compounded quarterly?;a.;7.2424;b.;15.5759;c.;5.6478;d.;3.3168;1 points;Question 15;An investment is acceptable if the profitability;index (PI) of the investment is;a.;less than the net present value (NPV).;b.;less than one.;c.;greater than one.;d.;greater than the internal rate of return (IRR).;e.;greater than a pre-specified rate of return.;1 points;Question 16;Suppose that today's stock price is \$49.8. If;the required rate on equity is 18.6% and the growth rate is 7.9%, compute the;expected dividend (i.e. compute D1);a.;\$7.2447;b.;\$10.6483;c.;\$5.3286;d.;\$2.5643;1 points;Question 17;The common stock of ABC Industries is valued at;\$49 a share. The company increases their dividend by 3.1 percent annually and;expects their next dividend to be \$1.84. What is the required rate of return on;this stock?;a.;2.82%;b.;3.61%;c.;4.87%;d.;6.86%;1 points;Question 18;ABC is reviewing a project that will cost;\$1,431.The project will produce cash flows \$210 at the end of each year for the;first two years and \$772 at the end of each year for the next two years. What;is the profitability index? Assume interest rate is 4%.;a.;1.56;b.;0.95;c.;1.22;d.;2.56;1 points;Question 19;ABC?s last dividend paid was \$4.4, its required;return is 13%, its growth rate is 6%, and its growth rate is expected to be;constant in the future. What is ABC's expected stock price in 19 years?;a.;\$104.37;b.;\$201.59;c.;\$98.15;d.;\$120.31;1 points;Question 20;A stock just paid a dividend of D0 = \$3.4. The;required rate of return is rs = 15.8%, and the constant growth rate is g = 3%.;What is the current stock price?;a.;\$35.76;b.;\$24.469;c.;\$3.4;d.;\$27.359

Paper#51886 | Written in 18-Jul-2015

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