Question 1

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

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

worth $21,000 when he is 21 years old. If the fund earns 0.11 interest

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

Question 3

If you were to borrow $9,600 over five years at 0.11 compounded monthly,

what would be your monthly payment?

Question 4

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 0.07 compounded

quarterly?

Question 5

A stock has an expected return of 0.08 and a variance of 0.20. What is Its

coefficient of

variation?

Question 6

Use the following information to calculate your company’s expected return.

State Probability Return

Boom 20 percent 0.26 percent

Normal 60 percent 0.11 percent

Recession 20 percent -0.19 percent

Question 7

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

determine the beta for your portfolio.

Expected

return Amount of Investment Beta

Stock J 0.10 100 000 1.08

Stock M 0.08 300 000 0.72

Question 8

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 0.09, 0.14,

and 0.12, respectfully?

Question 9

The covariance of the returns between Willow Stock and Sky Diamond Stock is

0.0800. The variance of Willow is 0.2680, and the variance of Sky Diamond

is

0.1270. What is the correlation coefficient between the returns of the two

stocks?

Question 11

A project has the following cash flows:

0 1 2 3

(500) 160.00 200 290.000

Question 10

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 11

Christopher Electronics bought new machinery for $5,030,000 million. This

is expected to result in additional cash flows of $1,220,000 million over the

next 7 years. What is the payback period for this project? Their acceptance

period is five years.

Question 12

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 $445,386,

$512,178, $564,755, $764,997, $816,500, and $825,375 over the next six years.

What is the payback period?

Question 1

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

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

worth $21,000 when he is 21 years old. If the fund earns 0.11 interest

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

Question 3

If you were to borrow $9,600 over five years at 0.11 compounded monthly,

what would be your monthly payment?

Question 4

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 0.07 compounded

quarterly?

Question 5

A stock has an expected return of 0.08 and a variance of 0.20. What is Its

coefficient of

variation?

Question 6

Use the following information to calculate your company’s expected return.

State Probability Return

Boom 20 percent 0.26 percent

Normal 60 percent 0.11 percent

Recession 20 percent -0.19 percent

Question 7

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

determine the beta for your portfolio.

Expected

return Amount of Investment Beta

Stock J 0.10 100 000 1.08

Stock M 0.08 300 000 0.72

Question 8

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 0.09, 0.14,

and 0.12, respectfully?

Question 9

The covariance of the returns between Willow Stock and Sky Diamond Stock is

0.0800. The variance of Willow is 0.2680, and the variance of Sky Diamond

is

0.1270. What is the correlation coefficient between the returns of the two

stocks?

Question 11

A project has the following cash flows:

0 1 2 3

(500) 160.00 200 290.000

Question 10

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 11

Christopher Electronics bought new machinery for $5,030,000 million. This

is expected to result in additional cash flows of $1,220,000 million over the

next 7 years. What is the payback period for this project? Their acceptance

period is five years.

Question 12

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 $445,386,

$512,178, $564,755, $764,997, $816,500, and $825,375 over the next six years.

What is the payback period?

Question 1

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

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

worth $21,000 when he is 21 years old. If the fund earns 0.11 interest

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

Question 3

If you were to borrow $9,600 over five years at 0.11 compounded monthly,

what would be your monthly payment?

Question 4

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 0.07 compounded

quarterly?

Question 5

A stock has an expected return of 0.08 and a variance of 0.20. What is Its

coefficient of

variation?

Question 6

Use the following information to calculate your company’s expected return.

State Probability Return

Boom 20 percent 0.26 percent

Normal 60 percent 0.11 percent

Recession 20 percent -0.19 percent

Question 7

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

determine the beta for your portfolio.

Expected

return Amount of Investment Beta

Stock J 0.10 100 000 1.08

Stock M 0.08 300 000 0.72

Question 8

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 0.09, 0.14,

and 0.12, respectfully?

Question 9

The covariance of the returns between Willow Stock and Sky Diamond Stock is

0.0800. The variance of Willow is 0.2680, and the variance of Sky Diamond

is

0.1270. What is the correlation coefficient between the returns of the two

stocks?

Question 11

A project has the following cash flows:

0 1 2 3

(500) 160.00 200 290.000

Question 10

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 11

Christopher Electronics bought new machinery for $5,030,000 million. This

is expected to result in additional cash flows of $1,220,000 million over the

next 7 years. What is the payback period for this project? Their acceptance

period is five years.

Question 12

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 $445,386,

$512,178, $564,755, $764,997, $816,500, and $825,375 over the next six years.

What is the payback period?

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.)

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

worth $21,000 when he is 21 years old. If the fund earns 0.11 interest

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

If you were to borrow $9,600 over five years at 0.11 compounded monthly,

what would be your monthly payment?

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 0.07 compounded

quarterly?

A stock has an expected return of 0.08 and a variance of 0.20. What is Its

coefficient of

variation?

Use the following information to calculate your company’s expected return.

State Probability Return

Boom 20 percent 0.26 percent

Normal 60 percent 0.11 percent

Recession 20 percent -0.19 percent

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

determine the beta for your portfolio.

Expected

return Amount of Investment Beta

Stock J 0.10 100 000 1.08

Stock M 0.08 300 000 0.72

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 0.09, 0.14,

and 0.12, respectfully?

The covariance of the returns between Willow Stock and Sky Diamond Stock is

0.0800. The variance of Willow is 0.2680, and the variance of Sky Diamond

is

0.1270. What is the correlation coefficient between the returns of the two

stocks?

Question 11

A project has the following cash flows:

0 1 2 3

(500) 160.00 200 290.000

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

Christopher Electronics bought new machinery for $5,030,000 million. This

is expected to result in additional cash flows of $1,220,000 million over the

next 7 years. What is the payback period for this project? Their acceptance

period is five years.

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 $445,386,

$512,178, $564,755, $764,997, $816,500, and $825,375 over the next six years.

What is the payback period?