Higher the interest rate and higher the present value

Assignment Help Financial Management

Reference no: EM131495291

Part I. (Sentence Correction) All of the following statements are false. Please change the incorrect parts to make them true. DO NOT negate the sentence, unless necessary.

1. All else equal, the higher the interest rate is, the higher the present value (of a lump sum investment) is.

2. Given an interest rate of zero percent, the future value (of a lump sum investment) will always decrease if the investment time period is lengthened.

3. Travis is buying a car and will finance it with a loan that requires monthly payments of $265 for the next four years. His car payments can be an example of perpetuity.

4. Janis just won a scholarship that will pay her $500 a month, starting today and continuing for the next 48 months. The payments will be given every 1st day of the month. Her scholarship is an example of ordinary annuity.

Reference no: EM131495291

Questions Cloud

Calculated taxes due on a corporate taxable income : The correctly calculated taxes due on a corporate taxable income of $13,000,000 are closest to which of the following?

When business calculates taxable income from gross income : When a business calculates taxable income from gross income, which of the following is true?

What is the free cash flow to the equity holders of the firm : If the tax rate is 30% and the net debt of the firm increased by $45 million, what is the free cash flow to the equity holders of the firm?

Established trust fund that will provide annual scholarships : The Jones Brothers recently established a trust fund that will provide annual scholarships of $12,000 indefinitely. The fund is an example of annuity due.

Higher the interest rate and higher the present value : All else equal, the higher the interest rate is, the higher the present value (of a lump sum investment) is.

Compete in extreme sports events as a trick skier : Facts: Nina is a full-time CPA but she loves to compete in extreme sports events as a trick skier.

Amount of principal left to be paid back on car loan : Suppose the amount of principal left to be paid back on a car loan is given by P(t) and suppose a payment of k dollars is made on the loan each month.

Competitors products in the minds of the target consumers : When a marketer tries to move a product away from competitors’ products in the minds of the target consumers, the process is called:

Stainless steel systems makes industrial scrubbers : Stainless Steel Systems (SSS) makes industrial scrubbers. What is the financed monthly payment required to purchase a scrubber?

User Account

All Pages