Computation of present value

Reference no: EM1355844

1. You will require $700 in 5 years. If you earn 5 percent interest on your funds, how much will you need to invest today to reach your goal?
a. $575.34
b. $548.47
c. $545.44
d. $573.35
2. You deposit $1,000 in your bank account. If the bank pays 4 percent compounded interest, how much will you accumulate in your account after 10 years?
a. $1,400
b. $1,500
c. $1,480
d. $1,343
3. A General Motors bond carries a coupon rate of 8 percent, has 9 years until maturity, and sells at a yield to maturity of 7 percent. At what price does the bond sell for?
a. $1,065
b. $1,108
c. $1,080
d. $1,040

4. Given two projects what are the decision models that you can use to make a decision as to which project you should accept? Which is the better?

5. Why do companies pay dividends? In what ways can dividends be paid? How do companies decide on dividend payments?

6. In what ways is preferred stock like long-term debt? In what ways is it like common stock?

7. When securities are issued (IPO) what is the role of the underwriter?

Problem Show work

8. Presented are two mutually exclusive projects under consideration by the BUILDERS-R-US Company:

Year Project A Project B
0 -30,000 -50,000
1 10,000 15,000
2 10,000 15,000
3 10,000 15,000
4 10,000 15,000

The cost of capital is 10%.

A) Payback period
B) NPV
C) IRR

Reference no: EM1355844

Questions Cloud

Treasury stock purchase-reissue journal entry : Prepare journal entries (A,B,C) and show proper disclosure (C) to reflect the following treasury stock transactions showing how each is accounted for under the cost method. (show computation)

Ethical dilemmas and conflicts-computer technology : Discuss the special ethical concerns that arise with each of the following issues: the use of computer technology and the Internet, record keeping, and multiple relationships.

Illustrate what is loss minimization output level : Illustrate what is the loss minimization output level for the firm. what is the Average profit or loss for the firm. what is the Total profit or loss for the firm.

Explain how do the elevators operate during a hurricane : Explain how do the elevators operate during a hurricane and there a way to secure guests' rooms while power is out?

Computation of present value : You will need $700 in five years. If you earn 5 percent interest on your funds, how much will you require to invest today to reach your goal?

What is the magnitude of her total displacement during walk : A wheel is spinning clockwise at a 10 revolutions per second at t = 0. Due to friction in the bearings supporting the axle, the wheel slows down, losing 0.500 revolutions per second in angular velocity each second, until it comes to rest.

Ethical issues arise when using psychological testing : Select a psychological test and describe how it is used in the workplace. What are the pros and cons of using this particular test? What ethical issues arise when using psychological testing?

Illustrate what does such a combination mean to this economy : Illustrate what does such a combination mean to this economy. Explain in detail being sure to discuss such a combination relative to resource utilization and efficiency.

Competitive advantages of a company : Explain wat drives the competitive advantages of a company

User Account

All Pages