Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Computer Engineering Expert

Request assistance with the following questions.

TRUE/FALSE

1. "Capital" is sometimes defined as funds supplied to a firm by investors.

CIRCLE THE CORRECT ANSWER:  True  False

2. A basic rule in capital budgeting is that if two independent projects have NPVs that are greater than zero, both projects should be accepted.

CIRCLE THE CORRECT ANSWER:  True  False

3. Different borrowers have different risks of bankruptcy, and bankruptcy is costly to lenders. Therefore, lenders charge higher rates to borrowers judged to be more at risk of going bankrupt.

CIRCLE THE CORRECT ANSWER:  True  False

4. Whenever a firm borrows money, it is using financial leverage.

CIRCLE THE CORRECT ANSWER:  True  False

5. Time lines cannot be constructed for annuities unless all the payments occur at the end of the periods.

CIRCLE THE CORRECT ANSWER:  True  False

6. If a bank compounds savings accounts quarterly, the effective annual rate will exceed the nominal rate.

CIRCLE THE CORRECT ANSWER:  True  False

7. Diversification will normally reduce the riskiness of a portfolio of stocks.

CIRCLE THE CORRECT ANSWER:  True  False

8. Starting to invest early for retirement reduces the benefits of compound interest.

CIRCLE THE CORRECT ANSWER:  True  False

9. When considering two mutually exclusive projects, you should reject the project with the higher net present value.

CIRCLE THE CORRECT ANSWER:  True  False

MULTIPLE CHOICE (CIRCLE THE CORRECT ANSWER)

10. Which of the following statements is CORRECT?

a. If a project has "normal" cash flows, then its MIRR must be positive.

b. If a project has "normal" cash flows, then it will have exactly two real IRRs.

c. The definition of "normal" cash flows is that the cash flow stream has one or more negative cash flows followed by a stream of positive cash flows and then one negative cash flow at the end of the project's life.

d. If a project has "normal" cash flows, then it can have only one real IRR, whereas a project with "nonnormal" cash flows might have more than one real IRR.

e. If a project has "normal" cash flows, then its IRR must be positive.

11. Which of the following statements is CORRECT?

a. The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects.

b. The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects.

c. The net present value method (NPV) is generally regarded as being the preferred method for evaluating capital investments.

d. The modified internal rate of return method (MIRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects.

e. The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects.

12. Poff Industries' stock currently sells for $120 a share. You own 100 shares of the stock. The company is contemplating a 2-for-1 stock split. Which of the following best describes what your position will be after such a split takes place?

a. You will have 200 shares of stock, and the stock will trade at or near $60 a share.

b. You will have 100 shares of stock, and the stock will trade at or near $60 a share.

c. You will have 50 shares of stock, and the stock will trade at or near $120 a share.

d. You will have 50 shares of stock, and the stock will trade at or near $60 a share.

e. You will have 200 shares of stock, and the stock will trade at or near $120 a share.

13. When comparing between two investment opportunities, the slides offer three possible solutions to determine which would investment provide the greatest wealth. Which of the following statements is INCORRECT?

a. Highest rate of return: Effective Annual Rate.

b. Greatest future wealth: Future Value.

c. MIRR: Multiple Interest Required Return.

d.  Greatest wealth today: Present Value.

14. Your bank account pays an 8% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT?

a. The periodic rate of interest is 8% and the effective rate of interest is also 8%.

b. The periodic rate of interest is 2% and the effective rate of interest is 4%.

c. The periodic rate of interest is 8% and the effective rate of interest is greater than 8%.

d. The periodic rate of interest is 4% and the effective rate of interest is less than 8%.

e. The periodic rate of interest is 2% and the effective rate of interest is greater than 8%.

15. JG Asset Services is recommending that you invest $1,500 in a 5-year certificate of deposit (CD) that pays 3.5% interest, compounded annually. How much will you have when the CD matures?

a. $1,781.53

b. $1,870.61

c. $1,964.14

d. $2,062.34

e. $2,165.46

16. Ellen now has $125. How much would she have after 8 years if she leaves it invested at 8.5% with annual compounding?

a. $205.83

b. $216.67

c. $228.07

d. $240.08

e. $252.08

17. Suppose a State of North Carolina bond will pay $1,000 ten years from now. If the going interest rate on these 10-year bonds is 5.5%, how much is the bond worth today?

a. $585.43

b. $614.70

c. $645.44

d. $677.71

e. $711.59

18. You expect to receive $5,000 in 25 years. How much is it worth today if the discount rate is 5.5%?

a. $1,067.95

b. $1,124.16

c. $1,183.33

d. $1,245.61

e. $1,311.17

19. You have just purchased a U.S. Treasury bond for $747.25. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate will you earn on this bond?

a. 4.37%

b. 4.86%

c. 5.40%

d. 6.00%

e. 6.60%

20. What is the PV of an annuity due with 5 payments of $2,500 at an interest rate of 5.5%?

a. $11,262.88

b. $11,826.02

c. $12,417.32

d. $13,038.19

e. $13,690.10

Computer Engineering, Engineering

  • Category:- Computer Engineering
  • Reference No.:- M92590202
  • Price:- $20

Priced at Now at $20, Verified Solution

Have any Question?


Related Questions in Computer Engineering

Python programmingplease i would like some help in checking

Python programming Please I would like some help in checking if my source code for is susceptible to short-circuit evaluation.I don't need answers, I just need corrections. The source code is to check the integer parts o ...

Question suppose you wanted to implement a new routing

Question : Suppose you wanted to implement a new routing protocol in the SDN control plane. At which layer would you implement that protocol? Explain. The response must be typed, single spaced, must be in times new roman ...

Think about a good or service for which you believe there

Think about a good or service for which you believe there has been a shift in demand or supply. Explain the reasons behind the shift and how that has influenced the equilibrium price.

What are the possible products when solutions of kbr and

What are the possible products when solutions of KBr and Sr(NO3)2 are mixed? And what is the identity of the precipitate.

Question three academically reviewed articles on management

Question: Three academically reviewed articles on Management Information Systems and complete the following activities: 1. Summarize all three (3) articles in 600 words or more in APA format with reference 2. Discuss at ...

Question based on what you learn from the vignette what do

Question: Based on what you learn from the vignette, what do you think are the relationships between Web analytics, text mining, and sentiment analysis? The response must be typed, single spaced, must be in times new rom ...

Describe 2 variables a government will look at to predict

Describe 2 variables a government will look at to predict where the economy will be in the next six months.

Suppose the probability density function for a random

Suppose the probability density function for a random variable X equals the following:  f(x) = cx 3  for {0 (a) Solve for the value of "c" that makes this a valid pdf. (Hint: please refer to the two necessary conditions ...

When i have a class that extends application public class

When I have a class that extends Application (public class Game extends Application) I can easily call it from my driver class by typing launch(Game.class). Now I have two other classes where one extends JFrame and the o ...

What is the solution for chapter 15 3e for java programming

What is the solution for chapter 15 3e for java programming 8th edition Create a JFrame that holds fjive buttons with the names of five different fonts. Include a sexth button that the user can click to make a font large ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As