33. If the cost of capital is 10%, what is the NPV of this project and should be accepted or rejected? Year 0 1 2 3 4 5 6 Cash Flow -$1000 200 400 600 600 200 600 A. $-240.13, reject B. $759.87, accept C. $835.86, accept D. $1,835.86, accept E. None of the above

34. If the present value of an ordinary, 5-year annuity is $6,000 and interest rates are 8 percent, what's the present value of the same annuity due? Hint: Two ways of doing it. A. $5,555.56 B. $6,000.00 C. $6,300.00 D. $6,480.00 E. $6,709.91

35. Inflation, recession, and high interest rates are economic events that are characterized as A. Company-specific risk that can be diversified away. B. Market risk. C. Systematic risk that can be diversified away. D. Diversifiable risk. E. Unsystematic risk that can be diversified away. 10

36. Ten years ago, Jane invested $1,000 and locked in a 7 percent annual interest rate for 30 years (end 20 years from now). Mike can made a twenty-year investment today and lock in a 6 percent interest rate. How much money should he invest now in order to have the same amount of money in 20 years as Jane? A. $673.75 B. $1,206.59 C. $1,967.15 D. $2,373.54 E. $2,569.41

37. The "gold standard" of investment criteria refers to: A. net present value. B. internal rate of return. C. payback period. D. profitability index. E. discounted payback

38. The likelihood that managers may place personal goals ahead of corporate goals is called a(n): A. Agency problem B. Opportunity cost C. Self-fulfillment D. IPO E. None of the above

39. These feature debt securities or instruments with maturities of one year or less. A. money markets B. primary markets C. secondary markets D. over-the-counter stocks E. capital markets

40. This is by far the most common type of business in the United States. A. Sole proprietorship B. Partnership C. Corporation D. Hybrid organizations E. Kansai organizations

41. This ratio measures a firms ability to pay off short-term obligations without relying on inventory sales. A. cash B. current C. internal-growth 11 D. quick or acid test E. profit margin

42. Using the payback method, what is the payback of this project? Year 0 1 2 3 4 5 6 Cash Flow -$1000 200 400 600 600 200 600 A. 0 years B. 1.33 years C. 2.67 years D. 4.00 years E. 3.09 years

43. What annual rate of return is earned on a $5,000 investment when it grows to $7,000 in six years? A. 1.40% B. 5.45% C. 5.77% D. 40.00% E. 8.97%

44. What is the approximate IRR for a project that costs $100,000 and provides cash inflows of $30,000 for 6 years? Think about YTM and this is an easy problem to solve. A. 19.9% B. 30.0% C. 32.3% D. 80.0% E. None of the above