Corporate Finance Quiz 2

Find the EAR in each of the following cases. APRNumber of Times CompoundedEAR 10.2% Quarterly 18.0% Monthly 13.5% Daily 9.5% Semiannually (Use 365 days in a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16; enter percentages as percentages excluding the % sign, not as decimals.)

-10.60 -19.56 -14.45 -9.73

Find the APR in each of the following cases. EARNumber of Times CompoundedAPR 15.3% Semiannually 8.7% Monthly 9.4% Weekly 14.9% Daily (Use 365 days in a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16; enter percentages as percentages excluding the % sign, not as decimals.)

-14.76 -8.73 -8.99 -13.89

Solve for the unknown number of years in each of the following: (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) PVIYFVN$195 8% $873 $2,105 11% $3,500 $47,800 10% $326,500 $38,650 10% $213,380

-19.48 -4.87 -20.16 -17.93

Fox Co. has identified an investment project with the following cash flows: YearCash Flow 1 $570 2 $430 3 $840 4 $1,230 If the discount rate is 10%, what is the present value of these cash flows? What is the present value at 18%? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

-2344.76 -1937.54

For each of the following annuities, calculate the annual cash flow: Present ValueInterest RateYearsCash Flow$15,000 11% 6 $21,400 7% 8 $145,300 8% 15 $325,000 6% 20 (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

-3545.65 -3583.81 -16975.33 -28334.98

An investment offers $6,125 per year for 15 years, with the first payment occurring one year from now. Assume the required return is 8 percent. What is the value of the investment today? What would the value be if the payments occurred for 40 years? What would the value be if the payments occurred for 75 years? What would the value be if the payments occurred forever

-52426.81 -73038.26 -76324.14 -76562.50

For each of the following, compute the future value: (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) PVNI/YFV$2,960 7 13% $7,846 16 7% $85,381 19 9% $221,614 26 5%

-6963.71 -23162.68 -439000.18 -787986.85

Solve for the unknown interest rate in each of the following: (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16; enter the percentage as a percentage excluding the % sign, not as a decimal.) PVNFVIY$715 9 $1,381 $905 12 $1,718 $15,000 26 $141,832 $70,300 15 $312,815

-7.59 -5.49 -9.03 -10.46

For each of the following, compute the present value: (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) FVNI/YPV$19,415 15 7% $47,382 8 11% $312,176 13 10% $629,381 25 13%

-7036.89 -20560.31 -90426.27 -29645.07

First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City Bank pays 7 percent interest compounded annually. If you made a deposit of $7,900 in each bank, how much more money would you earn from your Second City Bank account at the end of 10 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

2,110.5