1.
You want to take a vacation in 4 years and feel you’ll need $8,500
to do so. If you can earn 5% on your deposits, how much will you
need to deposit in each of the next four years to have the needed
amount? PMT = 1972.10058
2. What is the effective annual rate on a credit card
that states that their APR is 21%, compounded monthly? 23.144% 3.
What is the present value of $1,000 to be received 2 years from now
using a discount rate of 5%, with continuous compounding? PV =
904.83742
4.
What is the future value of $1,000 three years from now at a rate
of 6%, continuously compounded? FV = 1197.22
5.
Shareholder wealth is measured by the MARKET VALUE of the
shareholders' common stock holdings.
6.
A big company had an operating income (EBIT) of $260,000 last year.
The firm had $48,000 in depreciation expenses, $15,000 in interest
expenses, and $40,000 in selling, general, and administrative
expenses. If the company has a marginal tax rate of 40 percent,
what was its after-tax income for last year? NI = 147,000
7.
Calculate the present value of an annuity due which pays you $50
annually for 5 years using a discount rate of 6%. PV = 223.26
8.
You have an investment that pays you $5000 annually forever. If the
initial deposit earns 8%, what was the initial deposit?
$62500
9.
LMN Corp’s dividends have grown from $1.85 to $2.15 over the last 5
years. What is the growth rate in dividends? I/Y = 3.05%
10.
Your credit card bill states that your APR is 18%. You are paying
monthly at a rate of 1.5% on your balances, so interest is
compounding monthly. What is the effective annual interest rate?
(Set your calculator to 4 decimals). 19.56%
11.
According to the rule of 72, if my investment is earning 9%
annually, it will take ______ years for me to double my
money.
12.
AGENCY problems arise from the divergent objectives between owners
and managers.