Under which of the given discounting methods will the

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Question 1. The future value of an annuity is typically used when analyzing

  • retirement plans.
  • alternative capital budgeting proposals.
  • the price of common stock.
  • loan amortization schedules.

Question 2. Under which of the following discounting methods will the present value of an investment be the highest, assuming the same annual interest rate?

  • Yearly.
  • Continuous.
  • Quarterly.
  • Monthly.

Question 3. What is the value of this 20 year lease? The first payment, due one year from today is $2,000 and each annual payment will increase by 4%. The discount rate used to evaluate similar leases is 9%. (Round to the nearest dollar.)

  • $ 39,856
  • $ 40,000
  • $ 68,000
  • $ 24,361

Question 4. Time to attain goal: Elegant Designers have generated sales of $625,000 for the current year. If they can grow their sales at a rate of 12 percent every year, how long will they take to triple their sales? (Round off to the nearest year.)

  • 9 years
  • 10 years
  • 8 years
  • 7 years

Reference no: EM13476989

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