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Dr. J
FINA
UBUS 310
Time Value of Money Review—3

____ 1. A perpetuity is best described as:
|a. |An annuity that goes on forever |
|b. |Requires the use of the CF or cash flow registers. |
|c. |Contains unequal cash flows from period to period |
|d. |all of the above |

____ 2. The present value of 100, 200 and 700 in years one through three, respectively:
|a. |Can be determined by using the
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What would the future value be if interest is compounded quarterly?
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____ 12. Refer to question 9. What would the future value be if interest is compounded monthly?
| | |

____ 13. Refer to question 9. What would be the future value if interest is compounded weekly?
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____ 14. Refer to question 9. What would be the future value if interest is compounded daily?
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____ 15. A 12% return, compounded annually, has an effective annual return of 12.6%
|a. |True |
|b. |False |

____ 16. What is the most your firm should pay to receive the following cash flows if a 12% return is required?

|Year 1 |$5,000 |
|Year 2 |$8,000 |
|Year 3
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