answer the questions in the files. mc and some questions

1. Present Value of Multiple Annuities (LG4) A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $2,100 per month for the next three years and then $1,100 per month for two years after that. If the bank is charging customers 10.00 percent APR, how much would it be willing to lend the business owner? (Do not round intermediate calculations and round your final answer to 2 decimal places.) 2. MC Qu. 150 Future Value At age age1 you invest $amt that earns rate1 percen... Future Value At age 25 you invest $1,100 that earns 7.25 percent each year. At age 35 you invest $1,100 that earns 10.25 percent per year. In which case would you have more money at age 60? A. At age 35 invest $1,100 at 10.25 percent. B. At age 25 invest $1,100 at 7.25 percent. C. Both yield the same amount at age 60. D. There is not enough information to determine which case earns the most money at age 60 3.Problem 5-23 Present Value of Multiple Annuities (LG4) A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $3,000 per month for the next three years and then $6,000 per month for two years after that. If the bank is charging customers 10.00 percent APR, how much would it be willing to lend the business owner? (Do not round intermediate calculations and round your final answer to 2 decimal places.) 4. Problem 5-15 Effective Annual Rate (LG7) A loan is offered with monthly payments and a 10.50 percent APR. What's the loan's effective annual rate (EAR)? (Do not round intermediate calculations and round your final answer to 2 decimal places.) 5. Problem 4-35 Solving for Rates (LG7) You invested $2,000 in the stock market one year ago. Today, the investment is valued at $1,760. What return did you earn? (Negative answer should be indicated by a minus sign.) Return earned % What return would you need to get next year to break even overall? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Return earned 6. MC % Qu. 123 Free Cash Flow Catering Corp. reported free cash flows for 2008 ... Free Cash Flow Catering Corp. reported free cash flows for 2008 of $8.03 million and investment in operating capital of $2.03 million. Catering listed $1.03 million in depreciation expense and $2.03 million in taxes on its 2008 income statement. What was Catering's 2008 EBIT? A. $11.06 million B. $7 million C. $10.06 million D. $13.12 million 7. Problem 4-26 Moving Cash Flows (LG5) What is the value in year 2 of a $1,400 cash flow made in year 7 if interest rates are 10 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Value in year 2 $ 8. MC Qu. 154 Moving Cash Flow You are scheduled to receive a $cf1 cash flow i... Moving Cash Flow You are scheduled to receive a $490 cash flow in one year, a $790 cash flow in two years, and pay a $390 payment in three years. If interest rates are 8 percent per year, what is the combined present value of these cash flows? A. $1,440.60 B. $821.41 C. $890.00 D. $1,280.00 9. Problem 5-26 Present Value (LG4) You are looking to buy a car. You can afford $640 in monthly payments for five years. In addition to the loan, you can make a $740 down payment. If interest rates are 8.25 percent APR, what price of car can you afford? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value $ 10. Problem 5-35 Annuity Interest Rate (LG8) What annual interest rate would you need to earn if you wanted a $1,000 per month contribution to grow to $81,500 in six years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Annual interest rate % 11. Problem 2-3 Income Statement (LG1) The Fitness Studio, Inc.'s, 2012 income statement lists the following income and expenses: EBIT = $533,000, interest expense = $66,000, and net income = $439,000. Calculate the 2012 taxes reported on the income statement. Taxes $ 12. Problem 5-47 Low Financing or Cash Back? (LG4, LG9) A car company is offering a choice of deals. You can receive $2,000 cash back on the purchase or a 2.6 percent APR, 3-year loan. The price of the car is $22,000 and you could obtain a 3-year loan from your credit union, at 6.6 percent APR. Which deal is cheaper? 2.6 percent APR offer $2 000 cash back offer 13. Problem 5-39 Loan Payments (LG9) You wish to buy a $28,000 car. The dealer offers you a 4-year loan with a 10 percent APR. What are the monthly payments? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Payment $ per month How would the payment differ if you paid interest only? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Payment $ per month 14. Problem 5-52 Investing for Retirement (LG4, LG9) Ross has decided that he wants to build enough retirement wealth that, if invested at 6 percent per year, will provide him with $4,300 of monthly income for 25 years. To date, he has saved nothing, but he still has 15 years until he retires. How much money does he need to contribute per month to reach his goal? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Contribute per month $ 15. Problem 5-7 Present Value of an Annuity (LG4) What's the present value of a $850 annuity payment over five years if interest rates are 9 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value $ 16. Problem 5-1 Future Value (LG1) Compute the future value in year 9 of a $2,400 deposit in year 1 and another $1,900 deposit at the end of year 5 using a 9 percent interest rate. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value $ 17. Problem 5-44 Future Value (LG1) Given a 10 percent interest rate, compute the year 7 future value if deposits of $2,800 and $3,800 are made in years 2 and 3, respectively, and a withdrawal of $925 is made in year 5. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value 18. Problem $ 5-10 Present Value of a Perpetuity (LG5) What's the present value, when interest rates are 8.5 percent, of a $180 payment made every year forever?(Round your answer to 2 decimal places.) Present value 19. Problem $ 5-14 Future Value of an Annuity Due (LG6) If the future value of an ordinary, 8-year annuity is $8,000 and interest rates are 10.0 percent, what's the future value of the same annuity due? (Round your answer to 2 decimal places.) Future value 20. Problem $ 4-13 Present Value with Different Discount Rates (LG4) Compute the present value of $1,200 paid in three years using the following discount rates: 5 percent in the first year, 6 percent in the second year, and 7 percent in the third year. (Do not round intermediate calculations and round your answer to 2 decimal places.) Present value 21. Problem $ 2-4 Income Statement (LG1) The Fitness Studio, Inc.'s, 2012 income statement lists the following income and expenses: EBIT = $781,000, interest expense = $250,000, and taxes = $185,850. The firm has no preferred stock outstanding and 100,000 shares of common stock outstanding. Calculate the 2012 earnings per share. (Round your answer to 2 decimal places.) Earnings per share 22. Problem $ 5-37 Add-on Interest Payments (LG8) To borrow $2,100, you are offered an add-on interest loan at 10 percent. Two loan payments are to be made, one at six months and the other at the end of the year. Compute the two equal payments. Two equal payments 23. Problem $ 5-19 Future Value of Multiple Annuities (LG2) Assume that you contribute $240 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $480 per month for another 25 years. Given a 6 percent interest rate, what is the value of your retirement plan after the 40 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value of multiple annuities 24. Problem $ 4-7 Compounding with Different Interest Rates (LG3) A deposit of $280 earns the following interest rates: a. 10 percent in the first year. b. 8 percent in the second year. c. 7 percent in the third year. What would be the third year future value? (Round your answer to 2 decimal places.) Future value 25. Problem $ 4-14 Present Value with Different Discount Rates (LG4) Compute the present value of $4,600 paid in two years using the following discount rates: 7 percent in the first year and 6 percent in the second year. (Do not round intermediate calculations and round your answer to 2 decimal places.) Present value 26. Problem $ 5-41 Number of Annuity Payments (LG9) Joey realizes that he has charged too much on his credit card and has racked up $4,100 in debt. If he can pay $150 each month and the card charges 17 percent APR (compounded monthly), how long will it take him to pay off the debt? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Time to pay off the debt 27. Problem months 5-54 Loan Balance (LG9) Hank purchased a $23,500 car two years ago using a 8 percent, 4-year loan. He has decided that he would sell the car now, if he could get a price that would pay off the balance of his loan. What's the minimum price Hank would need to receive for his car? (Round the loan payment to the nearest cent but do not round any other interim calculations. Round your final answer to 2 decimal places.) Minimum price 28. Problem $ 5-16 Effective Annual Rate (LG7) A loan is offered with monthly payments and a 13.75 percent APR. What's the loan's effective annual rate (EAR)? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Effective annual rate 29. Problem % 4-29 Solving for Rates (LG7) What annual rate of return is earned on a $1,000 investment when it grows to $1,600 in four years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Annual rate of return 30. Problem % 4 and 5-8 House Appreciation and Mortgage Payments Say that you purchase a house for $204,000 by getting a mortgage for $180,000 and paying a $24,000 down payment. If you get a 20-year mortgage with a 7 percent interest rate, what are the monthly payments? (Do not round intermediate calculations and round your final answer to 2 decimal places.) PMT $ What would the loan balance be in five years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) PVA $ If the house appreciates at 4 percent per year, what will be the value of the house in five years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) FV $ How much of this value is your equity? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Equity 31. Problem $ 5-30 Future and Present Value of an Annuity Due (LG6) If you start making $135 monthly contributions today and continue them for four years, what is their future value if the compounding rate is 11.75 percent APR? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value annuity $ What is the present value of this annuity? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value $ annuity 32. MC Qu. 153 Solving for Rates What annual rate of return is implied on a $am... Solving for Rates What annual rate of return is implied on a $1,100 loan taken next year when $1,800 must be repaid in year 8? A. 6.35% B. 7.95% C. 9.09% D. 7.29% 33. Problem 5-8 Present Value of an Annuity (LG4) What's the present value of a $690 annuity payment over five years if interest rates are 9 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value $ 34. MC Qu. 142 Interest-on-Interest Consider a $dep deposit earning rate percen... Interest-on-Interest Consider a $2,000 deposit earning 6 percent interest per year for 5 years. How much total interest is earned on the original deposit (excluding interest earned on interest)? A. $600.00 b. $76.45 C. $676.45 D. $60.00 35. Problem 5-38 Annuity Interest Rate (LG8) To borrow $1,700, you are offered an add-on interest loan at 6 percent. Three loan payments are to be made, one at four months, another at eight months, and the last one at the end of the year. Compute the three equal payments. (Round your answer to 2 decimal places.) Three equal payments 36. Problem $ 5-40 Loan Payments (LG9) You wish to buy a $9,500 dining room set. The furniture store offers you a 2-year loan with an 11 percent APR. What are the monthly payments? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Payment $ per month How would the payment differ if you paid interest only? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Payment 37. Problem $ per month 2-15 Market Value versus Book Value (LG2) Muffin's Masonry, Inc.'s, balance sheet lists net fixed assets as $31.00 million. The fixed assets could currently be sold for $53.00 million. Muffin's current balance sheet shows current liabilities of $14.00 million and net working capital of $13.00 million. If all the current accounts were liquidated today, the company would receive $8.10 million cash after paying the $14.00 million in current liabilities. What is the book value of Muffin's Masonry's assets today and the market value of these assets? (Enter your answers in millions of dollars rounded to 2 decimal places.) BOOK VALUE Current assets $ Fixed assets Total MARKET VALUE m $ m $ m m m $ m MC Qu. 112 Balance Sheet Jack and Jill Corporation's year-end 2009 balance ... 38. Balance Sheet Jack and Jill Corporation's year-end 2009 balance sheet lists current assets of $256,000, fixed assets of $806,000, current liabilities of $189,000, and long-term debt of $294,000. What is Jack and Jill's total stockholders' equity? A. There is not enough information to calculate total stockholder's equity. B. $579,000 C. $483,000 D. $1,062,000 39. MC Qu. 138 Compounding with Different Interest Rates A deposit of $dep earn... Compounding with Different Interest Rates A deposit of $470 earns interest rates of 8.7 percent in the first year and 10.7 percent in the second year. What would be the second year future value? a. $1,031.18 b. $565.56 c. $561.18 d. $999.88 40. Problem 5-43 Future Value (LG1) Given an 8 percent interest rate, compute the year 7 future value if deposits of $2,500 and $3,500 are made in years 1 and 3, respectively, and a withdrawal of $1,075 is made in year 4. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value $