44. A 100,000 bond issue with 5% coupon rate, matures in 5 years and has a yield rate or 6 % is sold at: Note the interest is paid at the end of each year.

a. discount

b. premium

c. at par

d. not determinable

45. Assuming the same facts as in 44 above, the annual cash payment that the borrower will pay to the lender or bondholder is:

a. 6,000

b. 11,000

c. 5,000

d. none of the above

46. the interest rate use in discounting the principal and the annuities in 44 above is:

a. 5%

b. 6%

c.11%

d. none of the above

47. Based on the discounted net present value of 44 above, as an investor, would you buy the bonds? Assuming that the company issuing the Bond is a reputable company.

a. yes

b. no

c. not at all

d. not sure

48. In the fifth year at maturity as an investor, you should receive in cash the following:

a. $5,000 only

b. 105,000 only

c. 100,000 only

d. none of the above

49. A great deal of time is spent in analyzing capital projects because:

a. they involve large sums of money

b. they take a long time to yield some benefits

c. the environment may change making good decisions look like bad decisions

d. all of the above

e. none of the above

50. In short-term decision making, time value of money is not considered because:

a. Its is assumed that conditions will remain stable

b. the value of money will remain relatively unchanged.

c. government policies will not drastically affect the decision

d. all of the above

e. none of the above