Financial literacy

You wish to purchase in 6 years an item that today costs $1,700. The cost is exp

You wish to purchase in 6 years an item that today costs $1,700. The cost is expected to inflate at an annual rate of 2.1%. You make a deposit today that perfectly finances the fu…

You wish to qualify for a $200,000 mortgage. Your monthly payment (principal and

You wish to qualify for a $200,000 mortgage. Your monthly payment (principal and interest) must not exceed 25% of your monthly income. Your monthly payment plus taxes and insuranc…

You wish to retire at age 50 and figure you need $75,000 per year in retirement

You wish to retire at age 50 and figure you need $75,000 per year in retirement in today’s dollars. Assume that payments are at the beginning of the year (as opposed to monthly to…

You wish to retire in 10 years, at which time you want to have accumulated enoug

You wish to retire in 10 years, at which time you want to have accumulated enough money to receive an annual annuity of $13,000 for 15 years after retirement. During the period be…

You wish to retire in 10 years, at which time you want to have accumulated enoug

You wish to retire in 10 years, at which time you want to have accumulated enough money to receive an annual annuity of $25,000 for 15 years after retirement. During the period be…

You wish to retire in 11 years, at which time you want to have accumulated enoug

You wish to retire in 11 years, at which time you want to have accumulated enough money to receive an annual annuity of $21,000 for 16 years after retirement. During the period be…

You wish to retire in 12 years, at which time you want to have accumulated enoug

You wish to retire in 12 years, at which time you want to have accumulated enough money to receive an annual annuity of $15,000 for 17 years after retirement. During the period be…

You wish to retire in 12 years, at which time you want to have accumulated enoug

You wish to retire in 12 years, at which time you want to have accumulated enough money to receive an annual annuity of $27,000 for 17 years after retirement. During the period be…

You wish to retire in 12 years, at which time you want to have accumulated enoug

You wish to retire in 12 years, at which time you want to have accumulated enough money to receive an annual annuity of $27,000 for 17 years after retirement. During the period be…

You wish to retire in 12 years, at which time you want to have accumulated enoug

You wish to retire in 12 years, at which time you want to have accumulated enough money to receive an annual annuity of $22,000 for 17 years after retirement. During the period be…

You wish to retire in 15 years, at which time you want to have accumulated enoug

You wish to retire in 15 years, at which time you want to have accumulated enough money to receive an annual annuity of $18,000 for 20 years after retirement. During the period be…

You wish to retire in 20 years, at which time you want to have accumulated enoug

You wish to retire in 20 years, at which time you want to have accumulated enough money to receive an annual annuity of $32,000 for 25 years after retirement. During the period be…

You wish to retire in 20 years, at which time you want to have accumulated enoug

You wish to retire in 20 years, at which time you want to have accumulated enough money to receive an annual annuity of $19,000 for 25 years after retirement. During the period be…

You won a lottery that will make equal payments of $1, 000 at the end of each ye

You won a lottery that will make equal payments of $1, 000 at the end of each year for the next eight years. If the annual interest rate stays constant at 7%, what is the value of…

You won a lottery! To collect your winnings you will be paid annual amounts of $

You won a lottery! To collect your winnings you will be paid annual amounts of $10,900 for each of the next 22 years. The appropriate discount rate is 9 percent per year. Calculat…

You won the lottery! However, in order to receive your first prize, you need to

You won the lottery! However, in order to receive your first prize, you need to choose among the following pay-out options. The APR is 20%, compounded semi-annually. Option A: You…

You work as a financial analyst at Stanley Furniture Company. You are evaluating

You work as a financial analyst at Stanley Furniture Company. You are evaluating a potential lease agreement on a new machine. The new machine can be purchased on January 1 for $5…

You work as a financial analyst for Athens Development Corporation. The company

You work as a financial analyst for Athens Development Corporation. The company is considering a new product that is sensitive to the economic conditions as well as consumer deman…

You work as an analyst at a credit-rating agency, and you are comparing firms in

You work as an analyst at a credit-rating agency, and you are comparing firms in the construction and engineering sector. One company in the portfolio of companies you are analyzi…

You work as the assistant to Michael Brown, a CFP with Securities Services, Inc.

You work as the assistant to Michael Brown, a CFP with Securities Services, Inc., an Akron, Ohio based medium-sized financial services firm. One of Michael's clients, Mr. Williams…

You work at a local furniture manufacturer that specializes in producing chairs

You work at a local furniture manufacturer that specializes in producing chairs and tables. Each table requires 4 units of wood and 3 hours to produce. Each chair required 2 units…

You work for ABC, Inc. in the finance department. Youown shares in ABC, Inc. tha

You work for ABC, Inc. in the finance department. Youown shares in ABC, Inc. that are selling at $20 per share on theNYSE. You just found out they will have a new stock offering. …

You work for Apple. After toiling away on $10.2 million worth of prototypes, you

You work for Apple. After toiling away on $10.2 million worth of prototypes, you have finally produced your answer to Google Glasses: iGlasses (the name alone is genius). iGlasses…

You work for Apple. After toiling away on $9.8 million worth of prototypes, you

You work for Apple. After toiling away on $9.8 million worth of prototypes, you have finally produced your answer to Google Glasses: iGlasses (the name alone is genius). iGlasses …

You work for Mattel, a profitable toy manufacturer, and you are negotiating with

You work for Mattel, a profitable toy manufacturer, and you are negotiating with Warner Brothers for the rights to manufacture and sell Harry Potter lunchboxes (you already sell r…

You work for Maverick Manufacturing (MM) and the Vice President of Finance has a

You work for Maverick Manufacturing (MM) and the Vice President of Finance has asked your group to evaluate a firm they are considering acquiring, EDK Industries, a smaller compet…

You work for Toyota. After the recent problems with car recalls, you have been a

You work for Toyota. After the recent problems with car recalls, you have been assigned the task of developing a new exciting product line. Your idea is the Toyota Toy-boat-a: an …

You work for a U.S. firm, and your boss has asked you to estimate the cost of ca

You work for a U.S. firm, and your boss has asked you to estimate the cost of capital for countries using the euro. You know that S = $1.2107/€ and F1 = $1.1507/€. Suppose the dol…

You work for a U.S. firm, and your boss has asked you to estimate the cost of ca

You work for a U.S. firm, and your boss has asked you to estimate the cost of capital for countries using the euro. You know that S = $1.2303 / € and F1 = $1.1542/ €. Suppose the …

You work for a bank as a business data analyst in the credit card risk-modeling

You work for a bank as a business data analyst in the credit card risk-modeling department. Your bank recently conducted a bold experiment: over a short time interval three years …

You work for a company that extends trade credit to customers. Currently your va

You work for a company that extends trade credit to customers. Currently your variable cost ratio is 65% and the annual rate of interest set by the company is 4% and the terms are…

You work for a consulting firm, and have submitted a bid for a large consulting

You work for a consulting firm, and have submitted a bid for a large consulting contract. The firm's management thinks it has a 50-50 chance of landing the project. In a few weeks…

You work for a local car dealership, and have been asked by your chamber of comm

You work for a local car dealership, and have been asked by your chamber of commerce to deliver a presentation to the community on buying a car. Your town consists of about 40,000…

You work for a local construction firm, \"DeVry Engineering Group\" and your sup

You work for a local construction firm, "DeVry Engineering Group" and your supervisor wants to test your knowledge and skills with Microsoft Excel and has instructed you to develo…

You work for a natural gas pipeline company; it has just spent $150,000,000 (fix

You work for a natural gas pipeline company; it has just spent $150,000,000 (fixed capital investment) building a new pipeline network that it plans to operate for 30 years. Assum…