Reference no: EM132421242

Question 1: If a nephew anticipates a $250,000 gift from a wealthy uncle in five years, what is the present value of the gift if the discount rate is 6%?

Question 2:A stockbroker wishes to retire in 15 years with $3,000,000 in her retirement account. How much will she have to put aside at the end of each year to reach her goal if she can invest her money at 8.5%?

Question 3:If there is a bankruptcy and a loan won't be paid off until another debt is satisfied, what is loan called?

Question 4:A $1,000 bond has a coupon rate of 3.5% and a market rate of 5%, what is the value of the bond if it matures in 5 years?

Question 5:If a bond has a coupon rate lower than the yield to maturity, what can we say about the bond price?

Question 6:A What will the annual interest payment be for a zero coupon bond?

Question 7:Which securities are issued by non-federal government organizations that might not be subject to federal income tax?

Question 8:What is the APY in relationship to the APR if compounding happens more frequently than once a year?

Question 9:A 2% $1,000 bond matures in 3 years. If the market interest rate is 2.9%, what is the price?

Question 10:A company wishes to improve the marketability of their bond and does so by putting in the option for the investor to replace their bond with common stock. What is this kind of bond called?

Question 11:If a company's credit rating is downgraded, what will happen to the price of its bonds?

Question 12: What is do you call a loan that does not require collateral?

Question 13: A project plan has the following forecast results with a WACC of 11%

What is the Net Present Value?

Initial Outlay: -70,000

Year 1         13,000

Year 2         15,000

Year 3 18,000

Year 4         20,000

Year 5         25,000

Question 14: A project has an NPV of 52,000. What does mean as far as acceptance?

Question 15: What is the net present value of expected future cash flows for a share of stock called?

Question 16: What is the internal rate of return given the following information about the project:

Initial Outlay                      -50,000

Year 1                                 20,000

Year 2                                 22,000

Year 3                                 18,000