1. If Analog Computers can borrow at 12% annually for three years, what is the effective rate of interest on a $1.000.000 loan where a 20% compensating balance is required?

a.12.00%

b.14.59%

c.12.75%

d.15.00%

2. After hearing about the great prices at Riverside Liquors, you stop by to pick up a few things and purchase a Lottery ticket. Your ticket wins $50,000,000. You are to receive $1,000,000 a year for the next 20 years and $30,000,000 in year 20. Your discount rate is 8%What is the present value of your winnings ?

a.$32,200,234

b.16,254,594

c. $12, 890,345

d.$22,345,444

3. A major limitation of the Balance sheet is that assets are carried at:

a. An arbitrary value

b.Acquisition cost less depreciation

c. Acquisition cost plus depreciation

d.Market Value