Q1. Assuming a discount rate of 10%, which stream of annual payments has the highest present value? A) $20 –$5 $20 $110 B) $110 $20 $10 $5 C) –$100 –$100 –$100 $500 Q2. Suppose you are going to deposit $1,000 at the start of this year, $1,500 at the start of next year, and $2,000 at the start of the following year in an savings account. How much money will you have at the end of three years if the rate of interest is 10% each year? A) $5,346.00. B) $4,000.00. C) $5,750.00. Q3. A firm is evaluating an investment that promises to generate the following annual cash flows: End of Year Cash Flows 1 $5,000 2 $5,000 3 $5,000 4 $5,000 5 $5,000 6 -0- 7 -0- 8 $2,000 9 $2,000 Given BBC uses an 8% discount rate, this investment should be valued at: A) $22,043. B) $19,963. C) $23,529. | 
发表于 2008-12-29 17:25
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