Money has time value

Assignment Help Finance Basics
Reference no: EM13532626

Question 1 2 pts When we say why we say "money has time value," we mean:<br>
When we say why we say "money has time value," we mean:

It takes time to make money

Time is money

Money to be received or paid at one time is not of the same value as money to be received or paid at another time

A dollar to be paid today is worth less than a dollar to be paid next week

Flag this Question
Question 2 2 pts It is important for managers to be familiar with time value of money concepts because:<br>
It is important for managers to be familiar with time value of money concepts because:

You need them to measure the value of future cash flows

It is illegal to manage a firm without them

Time value of money concepts affect how much managers are paid

They must be considered when making managerial decisions

Flag this Question
Question 3 2 pts Skip to question text.
In a rare moment of generosity, you give your nephew $100 on his first birthday. Your nephew's mother, however, knew about the time value of money, so she invested the gift in a 20-year 7% CD. (At maturity the CD pays back the principal plus accumulated interest at 7% a year.) If your nephew cashes in the CD at maturity, how much will he receive?

$107

$358

$387

$2,140

Flag this Question
Question 4 2 pts You deposit $2,000 in a savings account that pays 10 percent interest, compounded annually. How much will your account be worth in 15 years?<br>
You deposit $2,000 in a savings account that pays 10 percent interest, compounded annually. How much will your account be worth in 15 years?

$2,030.21

$5,000.00

$8,091.12

$8,354.50

$9,020.10

Flag this Question
Question 5 2 pts You can earn 8 percent interest, compounded annually. How much must you deposit today to withdraw $10,000 in 6 years?<br>
You can earn 8 percent interest, compounded annually. How much must you deposit today to withdraw $10,000 in 6 years?

$5,402.69

$6,301.70

$6,756.76

$8,432.10

$9,259.26

Flag this Question
Question 6 2 pts From a financial point of view, which is the best choice: to receive $10,000 now, or a note that promises $15,000 five years from now? Five year interest rates are 8%.<br>
From a financial point of view, which is the best choice: to receive $10,000 now, or a note that promises $15,000 five years from now? Five year interest rates are 8%.

$10,000 now

$15,000 five years from now

Flag this Question
Question 7 2 pts Examining your finances, you decide that you can afford to invest $1,200 each year toward your retirement fund. If you invest the money at the end of each year at 9% interest, and you retire in 20 years, how much will be in your fund at that time? <br>
Examining your finances, you decide that you can afford to invest $1,200 each year toward your retirement fund. If you invest the money at the end of each year at 9% interest, and you retire in 20 years, how much will be in your fund at that time?

$6,725

$10,954

$24,000

$61,392

Flag this Question
Question 8 2 pts Skip to question text.
You are in charge of a new Missouri State Lottery. The lottery rules say that winners are to be paid $10 million in the form of 10 annual payments of $1 million each. Assuming that the interest rate is 10% and the payments are to be made at the end of each of the next 10 years, how much money does your lottery organization have to deposit in an account today in order to make the required payments to a lottery winner?

$10,000,000

$3,855,433

$6,144,567

$9,090,909

Flag this Question
Question 9 2 pts Skip to question text.
In November 2007 you bought 100 shares of Microsoft stock for $35.375 a share. In November 2009 you sold your stock for $92.5625 a share. What was your average annual rate of return on your Microsoft investment? (disregard dividends and commissions)

262%

62%

585%

1.6%

Flag this Question
Question 10 2 pts Skip to question text.
You may have heard of zero coupon bonds (zero-coupon bonds pay their owners $1,000 at maturity and involve no other cash flows other than the purchase price). If you bought a zero coupon bond for $300, held the bond for 10 years, and then cashed it in for $1,000 at the end of the 10th year, what average annual rate of return would you realize on your investment?

30%

233%

113%

1.28%

12.79%

Reference no: EM13532626

Questions Cloud

Annual cash flow last period : Annual cash flow last period
How far does the skater move : Two skaters, one with mass 65 kg and the other with mass 60 kg, stand on an ice rink holding a pole of length 10 m and negligible mass. How far does the 60 kg skater move
Define when ammonia gas nh3 is passed over hot liquid sodium : When ammonia gas, NH3, is passed over hot liquid sodium metal, hydrogen gas, H2, is released and sodium amide, NaNH2, is formed as a solid product. What is the balancing Equation
Calculate what was the change in momentum : A $100 cart is moving down an inclined plane at 1.30 m.s, The cart collides with a stationary object and rebounds with a speed of 0.970 m/s. What was the change in momentum
Money has time value : money has time value
Process of revising current policies : Human services committee on organ transplantation is in the process of revising current policies - relevant principle of bioethics and any approriates theories studied over the past six modules
The reacts violently with water to form dissolved boric acid : Boron sulfide (B2S3) reacts violently with water to form dissolved boric acid, H3BO3, and hydrogen sulfide gas. What is the balanced Equation
Evaluate the maximum height the rock reaches : One side of the roof of a building slopes up at 43.0°. A roofer kicks a round, flat rock that has been thrown onto the roof by a neighborhood child. Determine the maximum height the rock reaches above the point where it was kicked
Function of avalve : Which of the following is the function of avalve?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd