UOP FIN 571 Week 4 WileyPLUS Practice Quiz UOP
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<strong>FIN</strong> <strong>571</strong> <strong>Week</strong> 4 <strong>WileyPLUS</strong> <strong>Practice</strong> <strong>Quiz</strong> NEW<br />
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<strong>FIN</strong> <strong>571</strong> <strong>Week</strong> 4 <strong>WileyPLUS</strong> <strong>Practice</strong> <strong>Quiz</strong> NEW<br />
Multiple Choice Question 66<br />
Present value: Tommie Harris is considering an investment that pays 6.5 percent annually. How much must he<br />
invest today such that he will have $25,000 in seven years? (Round to the nearest dollar.)<br />
$38,850<br />
$23,474<br />
$16,088<br />
$26,625<br />
Multiple Choice Question 61<br />
PV of multiple cash flows: Jack Stuart has loaned money to his brother at an interest rate of 5.75 percent. He<br />
expects to receive $625, $650, $700, and $800 at the end of the next four years as complete repayment of the loan<br />
with interest. How much did he loan out to his brother? (Round to the nearest dollar.)<br />
$2,250<br />
$2,545
$2,713<br />
$2,404<br />
Multiple Choice Question 63<br />
PV of multiple cash flows: Hassan Ali has made an investment that will pay him $11,455, $16,376, and $19,812 at<br />
the end of the next three years. His investment was to fetch him a return of 14 percent. What is the present value<br />
of these cash flows? (Round to the nearest dollar.)<br />
$33,124<br />
$36,022<br />
$41,675<br />
$39,208<br />
Multiple Choice Question 65<br />
PV of multiple cash flows: Pam Gregg is expecting cash flows of $50,000, $75,000, $125,000, and $250,000 from<br />
an inheritance over the next four years. If she can earn 11 percent on any investment that she makes, what is the<br />
present value of her inheritance? (Round to the nearest dollar.)<br />
$361,998<br />
$309,432<br />
$434,599<br />
$412,372<br />
Multiple Choice Question 66<br />
Present value of an annuity: Transit Insurance Company has made an investment in another company that will<br />
guarantee it a cash flow of $37,250 each year for the next five years. If the company uses a discount rate of 15<br />
percent on its investments, what is the present value of this investment? (Round to the nearest dollar.)<br />
$186,250<br />
$101,766<br />
$124,868<br />
$251,154
Multiple Choice Question 71<br />
Future value of an annuity: Carlos Menendez is planning to invest $3,500 every year for the next six years in an<br />
investment paying 12 percent annually. What will be the amount he will have at the end of the six years? (Round<br />
to the nearest dollar.)<br />
$28,403<br />
$24,670<br />
$26,124<br />
$21,000<br />
Multiple Choice Question 61<br />
Bond price: Briar Corp is issuing a 10-year bond with a coupon rate of 7 percent. The interest rate for similar<br />
bonds is currently 9 percent. Assuming annual payments, what is the present value of the bond? (Round to the<br />
nearest dollar.)<br />
$990<br />
$872<br />
$1,066<br />
$945<br />
Multiple Choice Question 56<br />
PV of dividends: Cortez, Inc., is expecting to pay out a dividend of $2.50 next year. After that it expects its<br />
dividend to grow at 7 percent for the next four years. What is the present value of dividends over the next fiveyear<br />
period if the required rate of return is 10 percent?<br />
$10.76<br />
$11.50<br />
$9.80<br />
$11.88<br />
Multiple Choice Question 59
PV of dividends: Givens, Inc., is a fast growing technology company that paid a $1.25 dividend last week. The<br />
company's expected growth rates over the next four years are as follows: 25 percent, 30 percent, 35 percent, and<br />
30 percent. The company then expects to settle down to a constant-growth rate of 8 percent annually. If the<br />
required rate of return is 12 percent, what is the present value of the dividends over the fast growth phase?<br />
$6.46<br />
$7.24<br />
$8.37<br />
$1.25