# hat is the future value of $1,000, placed in a saving account for four years if the account pays 0.06, compounded quarterly? (Your answer should be correct to two decimal places.)

Question 1 1

/ 1 point

What is the future value of $1,000, placed in a saving

account for four years if the account pays 0.06, compounded quarterly? (Your

answer should be correct to two decimal places.)

Question 2 1

/ 1 point

Your brother, who is 6 years old, just received a trust fund

that will be worth $25,000 when he is 21 years old. If the fund earns 0.08

interest compounded annually, what is the value of the fund today?

Question 3 1

/ 1 point

If you were to borrow $9,700 over five years at 0.10

compounded monthly, what would be your monthly payment?

Question 4 0

/ 1 point

Your uncle promises to give you $700 per quarter for the

next five years. How much is his promise worth right now if the interest rate

is 0.09 compounded quarterly?

Question 5 1

/ 1 point

A stock has an expected return of 0.10 and a variance of

0.22. What is Its coefficient of variation?

Question 6 0

/ 1 point

Use the following information to calculate your companys

expected return.

State Probability Return

Boom 20% 0.30

Normal 60% 0.10

Recession 20% -0.15

Question 7 1

/ 1 point

You have invested in stocks J and M. From the following

information, determine the beta for your portfolio.

Expected Amount of

Return Investment Beta

Stock J 0.10 $100,000 1.15

Stock M 0.09 $300,000 0.87

Question 8 1

/ 1 point

Frazier Manufacturing paid a dividend last year of

$2, which is expected to grow at a constant rate of 5%.

Frazier has a beta of

1.3. If the market is returning 11% and the risk-free rate

is 4%, calculate the

value of Fraziers stock.

$25.93

$31.33

$38.53

$41.63

Question 9 0

/ 1 point

You have invested 30 percent of your portfolio in Jacob,

Inc., 40 percent in Bella Co., and 30

percent in Edward Resources. What is the expected return of your portfolio if Jacob, Bella, and Edward

have expected returns of 0.06, 0.18, and 0.15, respectfully?

Question 10 1

/ 1 point

The covariance of the returns between Willow Stock and Sky

Diamond Stock is 0.0960. The variance of Willow is 0.2050, and the variance of

Sky Diamond is 0.1150. What is the correlation coefficient between the returns

of the two stocks?

Question 11 1

/ 1 point

A project has the following cash flows:

0 1 2 3

($500) $160.00 $200 $250.00

What is the projects NPV if the interest rate is $6%?

Question 12 1

/ 1 point

Medela’s Entertainment Systems is setting up to manufacture

a new line of video game consoles. The cost of the manufacturing equipment is

$1,750,000. Expected cash flows over the next four years are $725,000,

$850,000, $1,200,000, and $1,500,000. Given the company’s required rate of

return of 15 percent, what is the NPV of this project?

$1,169,806

$2,919,806

$4,669,806

$3,122, 607

Question 13 1

/ 1 point

A project requires an initial outlay of $100,000, and is

expected to generate annual net cash inflows of $28,000 for the next 5

years. Determine the payback period for

the project.

.28 years

1.4 years

3.57 years

Question 14 1

/ 1 point

An investment project requires an initial outlay of

$100,000, and is expected to generate annual cash inflows of $28,000 for the

next 5 years. (round to the nearest

tenth of the percentage) Determine the (Internal Rate of Return) IRR for the

project using a financial calculator

12.0%

3.6%

12.6%

12.4%

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Question 15 1

/ 1 point

Capital budgeting analysis of mutually exclusive projects A

and B yields the following:

Project A Project B

IRR 18% 22%

NPV $270,000 $255,000

Payback Period 2.5 yrs 2.0 yrs

Management should choose:

Project B because most executives prefer the IRR method

Project B because two out of three methods choose it

Project A because NPV is the best method

either project because the results arent consistent

Question 16 1

/ 1 point

Christopher Electronics bought new machinery for $5,075,000

million. This is expected to result in additional cash flows of $1,210,000

million over the next 7 years. What is the payback period for this

project? Their acceptance period is five

years.

Question 17 1

/ 1 point

AMP, Inc., has invested $2,165,800 on equipment. The firm

uses payback period criteria of not accepting any project that takes more than

four years to recover costs. The company anticipates cash flows of $451,386,

$512,178, $561,755, $764,997, $816,500, and $825,375 over the next six years.

What is the payback period?

Question 18 1

/ 1 point

18) A common-size financial statement is one in which each

number is expressed

as a percentage of some base number for the firm (such as

total assets or revenues)

as a percentage of an industry average (such as rate of

return)

as a percentage of a stock market average (such as market

capitalization)

as a percentage of a national average (such as per capita

GDP)

Question 19 1

/ 1 point

Return on Equity (ROE) is defined as:

Gross Income / Total Assets

Revenues / Total Debt

Net Income / Stockholders Equity

(Revenues COGS) / Total Liabilities

Question 20 1

/ 1 point

Which of the following ratios is incorrect?

Current ratio = Current assets / Current liabilities

Quick ratio = (Current assets Inventory) / Current

liabilities

Inventory turnover = (Cost of goods sold) / Inventory

Days Sales Outstanding = 365 / Accounts payable turnover

________________________________________

Question 1 1

/ 1 pointWhat is the future value of $1,000, placed in a saving

account for four years if the account pays 0.06, compounded quarterly? (Your

answer should be correct to two decimal places.)Question 2 1

/ 1 pointYour brother, who is 6 years old, just received a trust fund

that will be worth $25,000 when he is 21 years old. If the fund earns 0.08

interest compounded annually, what is the value of the fund today?Question 3 1

/ 1 pointIf you were to borrow $9,700 over five years at 0.10

compounded monthly, what would be your monthly payment?Question 4 0

/ 1 pointYour uncle promises to give you $700 per quarter for the

next five years. How much is his promise worth right now if the interest rate

is 0.09 compounded quarterly?Question 5 1

/ 1 pointA stock has an expected return of 0.10 and a variance of

0.22. What is Its coefficient of variation? Question 6 0

/ 1 pointUse the following information to calculate your companys

expected return. State Probability ReturnBoom 20% 0.30Normal 60% 0.10Recession 20% -0.15Question 7 1

/ 1 pointYou have invested in stocks J and M. From the following

information, determine the beta for your portfolio. Expected Amount of

Return Investment BetaStock J 0.10 $100,000 1.15Stock M 0.09 $300,000 0.87Question 8 1

/ 1 pointFrazier Manufacturing paid a dividend last year of$2, which is expected to grow at a constant rate of 5%.

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