3. Which of the following accounting items does not require the use of the present value concept?

A) Business combination B) Prepaid insurance C) Leases D) Long-term notes

4. An amount is deposited for eight years at 8%. If compounding occurs quarterly, then the present value table value (i.e. the factor) is found at A) 8% for eight periods. B) 2% for eight periods. C) 8% for 32 periods. D) 2% for 32 periods.

5. If the interest rate is 10%, the factor for the future value of annuity due of $1 for n = 5, i = 10% is equal to the factor for the future value of an ordinary annuity of $1 for n = 5, i = 10%

A) plus 1.10. B) minus 1.10. C) multiplied by 1.10. D) divided by 1.10.

6. Assume ABC Company deposits $70,000 with First National Bank in an account earning interest at 6% per annum, compounded semi-annually. How much will ABC have in the account after five years if interest is reinvested?

A) $94,074. B) $70,000. C) $91,000. D) $93,677.

7. Dunston Company will receive $300,000 in a future year. If the future receipt is discounted at an interest rate of 10%, its present value is $153,948. In how many years is the $300,000 received?

A) 5 years B) 6 years C) 7 years D) 8 years

8. Stech Co. is issuing $7.5 million 12% bonds in a private placement on July 1, 2014. Each $1,000 bond pays interest semi-annually on December 31 and June 30 of each year. The bonds mature in ten years. At the time of issuance, the market interest rate for similar types of bonds was 8%. What is the expected selling price of the bonds?

A) $9,538,574. B) $11,250,000. C) $9,512,998. D) $9,589,572.