Question 1

When you reach retirement age,you will have one fund of $100,000 from which you are going to make annual withdrawals of $14,702.The fund will earn 6% per year.For how many years will you be able to draw an even amount of $14,702?

Accepted Answer

$100,000/$14,702 = 6.8017, the present value of 1 annuity factor at 6% for nine periods.

Question 2

A company borrows money from the bank by promising to make six annual year-end payments of $25,000 each.How much is the company able to borrow if the interest rate is 9%?

Accepted Answer

The answer of A company borrows money from the bank...

Question 3

Madera Iron Sculpting is planning to save the money needed to replace one of its robotic welders in five years by making a one-time deposit of $20,000 today and four yearly contributions of $5,000 beginning at the end of year 1.The deposits will earn 10% interest.How much money will Sierra have accumulated at the end of five years to replace the welder?

Accepted Answer

The answer of Madera Iron Sculpting is planning to save...

Question 4

A company is setting aside $21,354 today and wishes to have $30,000 at the end of three years for a down payment on a piece of property.What interest rate must the company earn?

Accepted Answer

The answer of A company is setting aside $21,354 today...

Question 5

You hope to retire in 10 years.Regrettably you are only just now beginning to save money for this purpose.You expect to save $6,000 a year at an annual rate of 8%.How much will you have accumulated when you retire?

Accepted Answer

The answer of You hope to retire in 10 years.Regrettably...

Question 6

Daley Co.lends $524,210 to Davis Corporation.The terms of the loan require that Davis repay the loan with six semiannual period-end payments of $100,000 each.What semiannual interest rate is Davis paying on the loan?

Accepted Answer

The answer of Daley Co.lends $524,210 to Davis Corporation.The terms...

Question 7

To calculate present value of an amount,two factors are required: __________________ and ___________________.

Accepted Answer

The answer of To calculate present value of an amount,two...

Question 8

The interest rate is also called the __________________ rate.

Accepted Answer

The answer of The interest rate is also called the...

Question 9

A company is beginning a savings plan.It will save $15,000 per year for the next 10 years.How much will the company have accumulated after the tenth year-end deposit,assuming the fund earns 10% interest?

Accepted Answer

The answer of A company is beginning a savings plan.It...

Question 10

_____________ is a borrower's payment to the owner of an asset for its use.

Accepted Answer

The answer of _____________ is a borrower's payment to the...

Question 11

A company borrows money from the bank by promising to make eight semiannual payments of $9,000 each.How much is the company able to borrow if the interest rate is 10% compounded semiannually?

Accepted Answer

The answer of A company borrows money from the bank...

Question 12

A company has $50,000 today to invest in a fund that will earn 7%.How much will the fund contain at the end of eight years?

Accepted Answer

The answer of A company has $50,000 today to invest...

Question 13

A company is setting up a sinking fund to pay off $8,654,000 in bonds that are due in seven years.The fund will earn 7% interest,and the company intends to put away a series of equal year-end amounts for seven years.What amount must the company deposit annually?

Accepted Answer

The answer of A company is setting up a sinking...

Question 14

Troy has $105,000 now.He has a loan of $175,000 that he must pay at the end of five years.He can invest his $105,000 at 10% interest compounded semiannually.Will Troy have enough to pay his loan at the end of the five years?

Accepted Answer

The answer of Troy has $105,000 now.He has a loan...

Question 15

The future value of an ________________ annuity is the accumulated value of each annuity payment with interest as of the date of the final payment.

Accepted Answer

The answer of The future value of an ________________ annuity...

Question 16

An _____________ is a series of equal payments occurring at equal intervals.

Accepted Answer

The answer of An _____________ is a series of equal...

Question 17

Big League Sports borrowed $883,212 and must make annual year-end payments of $120,000 each.If the applicable interest rate is 6%,how many years will it take Big League Sports to pay off the loan?

Accepted Answer

The answer of Big League Sports borrowed $883,212 and must...

Question 18

Match between columns
                        Premises:  An unincorporated association of two or more persons to pursue a business for profit as co-owners.
 The agreement between partners that sets terms under which the affairs of the partnership are conducted.
 A financial statement that shows total capital balances at the beginning of the period, any additional investment by partners, the income or loss of the period, the partners' withdrawals and the ending capital balances.
 The legal relationship among general partners that makes each of them responsible for paying the debts of the partnership if the other partners are unable to pay their shares.
 A corporation that meets special tax qualifications so as to be treated like a partnership for income tax purposes.
 A partner who assumes unlimited liability for the debts of the partnership.
 A corporation that does not qualify for and elect to be treated like a partnership for income tax purposes and therefore is subject to income taxes.
 A partnership that has two classes of partners, limited partners and general partners. Limited partners have no personal liability beyond the amount they invest in the partnership and have no active role except as specified in the partnership agreement.
 A partnership that protects innocent partners from malpractice or negligence claims resulting from the acts of another partner.
 The legal relationship among partners whereby each partner can commit or bind the partnership to any contract within the scope of the partnership's business.

Accepted Answer

The Answer of Statement of changes in partner’s equity and is...

Quiz 26: Time Value of Money