8. Which is an example of discounting? B. Depreciation C. Interest payments on b

Question

8. Which is an example of discounting? B. Depreciation C. Interest payments on bonds D. Future free cash flows 9. What is the future value of $100 deposited today in 60 years, earning annual compound interest of 13% ? a, $97,333.34 b. $153,005.35 c. $213,741.82 d. $224,741.82 10. Wha 13%? at is the future value of $100 deposited today in 100 years, earning annual compound interest of a. $20,316,287.42 b. $72,554,963.01 c $76,541,221.90 d. $113,761,965.54 roblem: 11. Which of the following pertain to the Agency P a. aligning manager's actions for the best interest of shareholders b. having a Board of Directors oversee top management c. providing incentives for management to act with fiduciary responsibility for the owners d. all of the above 12. The yield curve: a. typically has a negative slope b. is flat because the coupon on T-bills is the same regardless of maturity date c. plots current YTM versus maturity date d. none of the above 13. What is the corporate tax rate in the U.S.? a. ranges from 0 %to 39% in a progressive structure depending on the firm's EBT b, ranges from 0% to 25% in a progressive structure depending on the firm's EBT c, 21% regardless of a firm's EBT d. None of the above Problems 14-21 refer to the following. You purchase a car for $22,000, put $1000 down, and have a loan for 6 years @ 3.9% making monthly payments. Use your answer in 14.to complete the amortization schedule. 14. What is the monthly payment? a. $314.87 b. $327.59 c. $352.14 d. $353.02

Explanation / Answer

8. d. Future free cash flows.

9. b. $ 153,005. 35.

Future value = $ 100 x ( 1.13 ) 60 = $ 100 x 1530.0535 = $ 153,005.35.

10. a. $ 20,316,287.42.

Future value = $ 100 x ( 1.13 ) 100 = $ 100 x 203162.8742 = 20,316,287.42.

14. b. $ 327.59.

Loan amount = $ 22,000 - $ 1,000 = $ 21,000.

Monthly payment = $ 21,000 / (PVAi= 0.325 %, n = 72 ) = $ 21,000 / 64.1040 = $ 327.59.

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