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FIN 571 Week 4 W .pdf



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FIN 571 Week 4 WileyPLUS Practice Quiz NEW
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http://www.assignmentcloud.com/FIN-571-NEW/FIN-571-Week-4WileyPLUS-Practice-Quiz-NEW
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FIN 571 Week 4 WileyPLUS Practice Quiz NEW
Multiple Choice Question 66
Present value: Tommie Harris is considering an investment that pays 6.5 percent annually. How much must
he invest today such that he will have $25,000 in seven years? (Round to the nearest dollar.)
$38,850
$23,474
$16,088
$26,625

Multiple Choice Question 61
PV of multiple cash flows: Jack Stuart has loaned money to his brother at an interest rate of 5.75 percent. He
expects to receive $625, $650, $700, and $800 at the end of the next four years as complete repayment of the
loan with interest. How much did he loan out to his brother? (Round to the nearest dollar.)
$2,250
$2,545

$2,713
$2,404

Multiple Choice Question 63
PV of multiple cash flows: Hassan Ali has made an investment that will pay him $11,455, $16,376, and
$19,812 at the end of the next three years. His investment was to fetch him a return of 14 percent. What is the
present value of these cash flows? (Round to the nearest dollar.)
$33,124
$36,022
$41,675
$39,208

Multiple Choice Question 65
PV of multiple cash flows: Pam Gregg is expecting cash flows of $50,000, $75,000, $125,000, and $250,000
from an inheritance over the next four years. If she can earn 11 percent on any investment that she makes,
what is the present value of her inheritance? (Round to the nearest dollar.)
$361,998
$309,432
$434,599
$412,372

Multiple Choice Question 66
Present value of an annuity: Transit Insurance Company has made an investment in another company that
will guarantee it a cash flow of $37,250 each year for the next five years. If the company uses a discount rate
of 15 percent on its investments, what is the present value of this investment? (Round to the nearest dollar.)
$186,250
$101,766
$124,868
$251,154

Multiple Choice Question 71
Future value of an annuity: Carlos Menendez is planning to invest $3,500 every year for the next six years in
an investment paying 12 percent annually. What will be the amount he will have at the end of the six years?
(Round to the nearest dollar.)
$28,403
$24,670
$26,124
$21,000

Multiple Choice Question 61
Bond price: Briar Corp is issuing a 10-year bond with a coupon rate of 7 percent. The interest rate for similar
bonds is currently 9 percent. Assuming annual payments, what is the present value of the bond? (Round to
the nearest dollar.)
$990
$872
$1,066
$945

Multiple Choice Question 56
PV of dividends: Cortez, Inc., is expecting to pay out a dividend of $2.50 next year. After that it expects its
dividend to grow at 7 percent for the next four years. What is the present value of dividends over the next
five-year period if the required rate of return is 10 percent?
$10.76
$11.50
$9.80
$11.88

Multiple Choice Question 59

PV of dividends: Givens, Inc., is a fast growing technology company that paid a $1.25 dividend last week. The
company's expected growth rates over the next four years are as follows: 25 percent, 30 percent, 35 percent,
and 30 percent. The company then expects to settle down to a constant-growth rate of 8 percent annually. If
the required rate of return is 12 percent, what is the present value of the dividends over the fast growth
phase?
$6.46
$7.24
$8.37
$1.25


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