Reference no: EM133117011

Course: Intermediate Financial Management 

Select the correct answer 1 & 2 and work out question 3. Thank you unadvanced.

1) When a company uses the expected values for its appraisal criterion, it can be assumed that the company's aim is to maximize _________.

A risk to attain a certain level of return

B the level of return irrespective of the level of risk

C the level of return for a certain amount of risk exposure

D the level of risk notwithstanding the level of return

2) Which of the following does not determine the amount of credit offered by a supplier?

A The credit terms the supplier obtains from its own suppliers.

B The ease with which the buyer can go elsewhere.

C The supplier's total risk exposure.

D The number of purchases made by the buyer each year.

3) A 6 year $800 annuity is starting today. Interest rates are 12%. Find the PV (Present Value) of the annuity.

present value=PMT*1-(1/1+r)^n/r

p=800*1-(1/1+0.12)^6/0.12

p=$3,289.13