Choose the 1. Calculate the final amount in a bank account after 2 years if $1000 is deposited at 6% per year interest compounded quarterly. 120mV A) $1126 B) $1136 C) $1226 D) $11260 2. Jan decides to invest $9,000 in a 401(k). If this is invested for 40 years, how much will there be in the account at the end? Assume that he invests in a broad stock market no-load index fund that has historically returned 12% per year. B) $877,458.73 A) $537,458.73 C) $837,458.73 D) $837,968.73 3. Jeff opens a charge card account with a department store. In the charge account agreement, the store indicated it charges 1.5% each month on the unpaid balance. What nominal annual interest rate is being charged? C) 16% 339 B) 18% A) 8% D) 14% 4. Sue opens a charge card account with a department store. In the charge account agreement, the store indicated it charges 2% each month on the unpaid balance. If the nominal annual interest rate is being charged is %24, what is the effective annual interest rate? B) 20.82% D) 26.82% 000 A) 19.82% 0 C) 16.82% 5. The basic requirement(s) that must be met for an asset to be depreciated? A) It must be used in business or held for production of income. B) It must have a definite service life, and that life must be longer than 1 year. C) It must be something that wears out, decays, gets used up, becomes obsolete, or loses value from natural causes. D) All of the mentioned. 6. How long would it take for an investment to triple if the interest rate is 10% compounded annually? A) n = 13 years B) n = 1.53 years C) n = 12.53 years D) n=11.53 years 7. An asset purchased for $50,000 is to be depreciated over 5 years using the straight-line method. Salvage value is $10,000. Its book value after 3 years is: A) $24.000 B) $26.000 C) $25.500 D) $25.000
Choose the 1. Calculate the final amount in a bank account after 2 years if $1000 is deposited at 6% per year interest compounded quarterly. 120mV A) $1126 B) $1136 C) $1226 D) $11260 2. Jan decides to invest $9,000 in a 401(k). If this is invested for 40 years, how much will there be in the account at the end? Assume that he invests in a broad stock market no-load index fund that has historically returned 12% per year. B) $877,458.73 A) $537,458.73 C) $837,458.73 D) $837,968.73 3. Jeff opens a charge card account with a department store. In the charge account agreement, the store indicated it charges 1.5% each month on the unpaid balance. What nominal annual interest rate is being charged? C) 16% 339 B) 18% A) 8% D) 14% 4. Sue opens a charge card account with a department store. In the charge account agreement, the store indicated it charges 2% each month on the unpaid balance. If the nominal annual interest rate is being charged is %24, what is the effective annual interest rate? B) 20.82% D) 26.82% 000 A) 19.82% 0 C) 16.82% 5. The basic requirement(s) that must be met for an asset to be depreciated? A) It must be used in business or held for production of income. B) It must have a definite service life, and that life must be longer than 1 year. C) It must be something that wears out, decays, gets used up, becomes obsolete, or loses value from natural causes. D) All of the mentioned. 6. How long would it take for an investment to triple if the interest rate is 10% compounded annually? A) n = 13 years B) n = 1.53 years C) n = 12.53 years D) n=11.53 years 7. An asset purchased for $50,000 is to be depreciated over 5 years using the straight-line method. Salvage value is $10,000. Its book value after 3 years is: A) $24.000 B) $26.000 C) $25.500 D) $25.000
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...
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Transcribed Image Text:Choose the correct answers for the following questions:
1. Calculate the final amount in a bank account after 2 years if $1000 is deposited at 6% per year
interest compounded quarterly.
500
120mvong
B) $1136
A) $1126
C) $1226
D) $11260
2. Jan decides to invest $9,000 in a 401(k). If this is invested for 40 years, how much will there be in
the account at the end? Assume that he invests in a broad stock market no-load index fund that has
historically returned 12% per year.
B) $877,458.73
A) $537,458.73
C) $837,458.73
D) $837,968.73
3. Jeff opens a charge card account with a department store. In the charge account agreement, the
store indicated it charges 1.5% each month on the unpaid balance. What nominal annual interest
rate is being charged?
B) 18%
A) 8%
C) 16%
D) 14%
4. Sue opens a charge card account with a department store. In the charge account agreement, the
store indicated it charges 2% each month on the unpaid balance. If the nominal annual interest rate
is being charged is %24, what is the effective annual interest rate?
B) 20.82%
A) 19.82%
C) 16.82%
5. The basic requirement(s) that must be met for an asset to be depreciated?
A) It must be used in business or held for production of income.
B) It must have a definite service life, and that life must be longer than 1 year.
C) It must be something that wears out, decays, gets used up, becomes obsolete, or loses value from
natural causes.
D) 26.82%
D) All of the mentioned.
6. How long would it take for an investment to triple if the interest rate is 10% compounded
annually?
A) n = 13 years
B) n = 1.53 years
C) n = 12.53 years
D) n=11.53 years
7. An asset purchased for $50,000 is to be depreciated over 5 years using the straight-line method.
Salvage value is $10,000. Its book value after 3 years is:
nasy?
Y
A) $24.000
B) $26.000
C) $25.500
D) $25.000
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