Question 1

What is required to calculate the net present value?

Accepted Answer

A)   the undiscounted cash inflow and the cash outflow
B)   the discounted cash inflow and the cash outflow
C)   the compounded cash inflow and the future cash flow
D)   the cash inflow and the discounted cash outflowE) A) and D)
F) B) and C)

Question 2

What term refers to a constant flow of money received or paid out over a given time period?

Accepted Answer

A)   a net cash flow
B)   an annuity
C)   a receipt
D)   an investmentE) A) and C)
F) A) and B)

Question 3

What two key concepts are involved in investment decisions?

Accepted Answer

A)   receipts and cash inflow
B)   disbursements and cash outflow
C)   net cash inflow and net cash receipts
D)   time value and cashE) B) and C)
F) A) and D)

Question 4

In capital budgeting, an ____________________ is considered a typical cash outflow.

Accepted Answer

The answer of In capital budgeting, an ____________________ is considered...

Question 5

________________________ is the process of finding the present value of a series of future cash flows.

Accepted Answer

The answer of ________________________ is the process of finding the...

Question 6

In which interest table is the factor 0.9090 found?

Accepted Answer

A)   the future value of an annuity table
B)   the present value of a single sum table
C)   the future value of a series of receipts table
D)   the future value of a single sum tableE) B) and C)
F) C) and D)

Question 7

A dollar earned today is worth ____________________ tomorrow.

Accepted Answer

The answer of A dollar earned today is worth ____________________...

Question 8

Which number is a typical interest factor used to calculate the future value of an annuity?

Accepted Answer

A)   +0.23
B)   0.231
C)   0.445
D)   6.105E) A) and C)
F) C) and D)

Question 9

What is the present value of a $1,000 investment made in year 0 if the interest is at 10%?

Accepted Answer

A)   - $ 1,000
B)   +$ 900
C)   + $ 1,000
D)   + $ 1,100E) C) and D)
F) All of the above

Question 10

What can be concluded when the NPV is 0?

Accepted Answer

A)   The undiscounted cash inflows equal the discounted cash outflow.
B)   The discounted cash inflows equal the cash outflow.
C)   The undiscounted cash inflows equal the undiscounted cash outflow.
D)   The discounted cash outflow equals the undiscounted cash inflows.E) A) and D)
F) B) and C)

Question 11

Match the words with the term.
-future sum of a stream of funds

Accepted Answer

A)   disbursements
B)   S
C)   receipts
D)   risk
E)   AF) C) and E)
G) C) and D)

Question 12

What does the rule of 72 show as an approximate number of years?

Accepted Answer

A)   the time to double when compounded annually
B)   the time to double when compounded semi-annually
C)   the time to double when compounded monthly
D)   the time to triple when compounded annuallyE) A) and B)
F) C) and D)

Question 13

Use the interest tables contained at the end of the textbook and/or a financial calculator to do the following exercises with this additional information.  Assume a 10% interest rate
-The compounded future value of the cash inflow is __________________________.

Accepted Answer

$ 132,400....

Question 14

Use the interest tables contained at the end of the textbook and/or a financial calculator to do the following exercises with this additional information:  Assume a 10% interest rate.
-The undiscounted value of the cash inflow is __________________________.

Accepted Answer

The answer of  Use the interest tables contained at...

Question 15

Use the interest tables contained at the end of the textbook and/or a financial calculator to do the following exercises with this additional information:  Assume a 10% interest rate.
-The net present value of the discounted cash flow is __________________________.

Accepted Answer

The answer of  Use the interest tables contained at...

Question 16

Note: Use the interest tables contained at the end of the textbook and/or a financial calculator to do the following exercises along with this additional information:  Assume an 8% interest rate
-The internal rate of return is approximately _______ %.

Accepted Answer

The answer of Note: Use the interest tables contained at...

Question 17

Match the words with the term.
-future value factor

Accepted Answer

A)   0.91745
B)   interest tables
C)   equal
D)   1.212
E)   FVn = P(1+i)  nF) None of the above
G) A) and B)

Question 18

A dollar earned today is worth less tomorrow.

Accepted Answer

A) True 
 B)False

Question 19

Note: Use the interest tables contained at the end of the textbook and/or a financial calculator to do the following exercises along with this additional information:  Assume an 8% interest rate
-The undiscounted present value of the cash flow is__________________________ .

Accepted Answer

The answer of Note: Use the interest tables contained at...

Question 20

Match the words with the term.
-probabilities

Accepted Answer

A)   interest
B)   investment
C)   inflation
D)   revenue
E)   riskF) A) and E)
G) C) and D)

Exam 10: Time-Value-Of-Money Concept

Note: Use the interest tables contained at the end of the textbook and/or a financial calculator to do the following exercises along with this additional information: Assume an 8% interest rate -The undiscounted present value of the cash flow is__________________________ .

Correct AnswerverifiedShow Answer

Which number is a typical interest factor used to calculate the future value of an annuity?

Correct AnswerverifiedShow Answer

Note: Use the interest tables contained at the end of the textbook and/or a financial calculator to do the following exercises along with this additional information: Assume an 8% interest rate -The internal rate of return is approximately _______ %.

Correct AnswerverifiedShow Answer

What is required to calculate the net present value?

Correct AnswerverifiedShow Answer

What term refers to a constant flow of money received or paid out over a given time period?

Correct AnswerverifiedShow Answer

Use the interest tables contained at the end of the textbook and/or a financial calculator to do the following exercises with this additional information: Assume a 10% interest rate. -The undiscounted value of the cash inflow is __________________________.

Correct AnswerverifiedShow Answer

What is the present value of a $1,000 investment made in year 0 if the interest is at 10%?

Correct AnswerverifiedShow Answer

A dollar earned today is worth less tomorrow.

Correct AnswerverifiedShow Answer

Use the interest tables contained at the end of the textbook and/or a financial calculator to do the following exercises with this additional information: Assume a 10% interest rate. -The net present value of the discounted cash flow is __________________________.

Correct AnswerverifiedShow Answer

What two key concepts are involved in investment decisions?

Correct AnswerverifiedShow Answer

Match the words with the term. -future sum of a stream of funds

Correct AnswerverifiedShow Answer

A dollar earned today is worth ____________________ tomorrow.

Correct AnswerverifiedShow Answer

Use the interest tables contained at the end of the textbook and/or a financial calculator to do the following exercises with this additional information. Assume a 10% interest rate -The compounded future value of the cash inflow is __________________________.

Correct Answerverified$ 132,400....View AnswerShow Answer

What can be concluded when the NPV is 0?

Correct AnswerverifiedShow Answer

________________________ is the process of finding the present value of a series of future cash flows.

Correct AnswerverifiedShow Answer

Match the words with the term. -probabilities

Correct AnswerverifiedShow Answer

What does the rule of 72 show as an approximate number of years?

Correct AnswerverifiedShow Answer

In capital budgeting, an ____________________ is considered a typical cash outflow.

Correct AnswerverifiedShow Answer

Match the words with the term. -future value factor

Correct AnswerverifiedShow Answer

In which interest table is the factor 0.9090 found?

Correct AnswerverifiedShow Answer

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$ 132,400....
View Answer

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