Choose the correct option

1. Zaiko Telecommunications is liable to pay $45,000 at the end of each year for 3 years due to a lawsuit. Find the present value needed today to make the payments in 4 years, if we assume an interest rate of 8% per year. *

$85,241.06

$82,422.60

$75,241.06

Other:

2. The manager at a local supermarket earns $50,000 per year. He received a 4.5% raise in a year in which the CPI increased by 3.5%. Find the gain or loss on his purchasing power. *

$500 Gain

$500 Loss

$1,000 Gain

Other:

3. Rosie Garcia has $10,540 in her savings account. Find the simple interest rate required for the fund to grow to $12,500 in 18 months. *

56.21%

12.4%

18%

Other:

4. A local branch of Gamestop, Inc., deposited $12,500 in a savings account on July 3 and then deposited an additional $3450 in the account on August 5. Find the balance on October 1 assuming an interest rate of 3.5% compounded daily. *

$16,077.25

$10,677.25

$16,977.25

Other:

5. A public utility needs $60 million in 5 years for a major capital expansion. What annual payment must the firm place into a sinking fund earning 5% per year in order to accumulate the required funds? *

$10,358,200

$11,858,200

$10,858,200

Other:

6. Cost: $18.00 Operating Expenses: $2.25 Profit: $3.10 Item Sells for $19.75 The selling price shown above gives which of the following results? *

Operating Loss

Absolute Loss

Reduced Net Profit

Break-Even

Other:

7. 350 cookies are made at a cost of $0.18 each. A markup rate (based on cost) of 80% is used. From past experience, about 15% of the cookies will go unsold and will be donated to a food pantry. Based on this information what should be the selling price for per cookie? *

$113.40

$0.324

$0.38

Other:

8. As a project manager, Regina Foster received a bonus of $18,000 for completing a difficult project on time. She invests it at 6% compounded quarterly for 5 years. Find the future value. *

$24,243.39

$22,243.39

$25,243.39

Other:

9. A corporation worth $40 million is expected to grow at 8% per year compounded annually for 5 years. (a) Find the future value to the nearest million. (b) The owners then propose to sell the firm and invest the proceeds in a new venture that should grow at 12% compounded annually for 4 years. Beginning with the future value from part (a) rounded to the nearest million, find the expected future value to the nearest million at the end of 4 additional years. *

$93 million; $59 million

$59 million; $93 million

$40 million; $83 million

Other:

10. John Fernandez figures his bike shop is worth $88,000 if sold today and that it will grow in value at 8% per year compounded annually for the next 6 years. If he sells the business, the funds will be invested at 5% compounded semiannually. (a) Find the future value of the shop. (b) What price should he insist on at this time if he sells the business? *

$103,842; $139,645

$139,645; $103,842

$149,645; $133,842

Other:

11. Jason Horton works for Chevron as a welder on offshore drilling rigs. His retirement plan contributions are $3800 at the beginning of each 6-month period. Assume that the account grows at 6% compounded semiannually for 15 years. Find the (a) future value of the annuity and (b) the interest earned. *

$52,547.60; $9,447.60

$9,947.60; $55,547.60

$55,547.60; $9,947.60

Other:

12. An engineer signs a contract to work in Hong Kong for 5 years. The contract specifies that at the end of his 5 years of service, he will receive $90,000 at the end of each of the following 3 years. Assume funds earn 6% compounded annually. (a) Find the amount needed at the end of his 5 years of service to fund the payments. (b) Find the end-of-year payment into a sinking fund needed to accumulate this amount. *

$240,570.90; $42,677.28

$250,570.90; $45,677.28

$42,677.28; $240,570.90

Other:

13. Face Value $816, Discount Rate 7.5%, Time (Days) 232, Discount _____ , Proceeds _____ *

2 points

$89.44; $796.56

$776.56; $39.44

$39.44; $776.56

Other:

14. A local oil-distribution company made the following purchases of gasoline tanks during the year: 18 at $420 each, 28 at $245 each, 37 at $245 each, and 20 at $180 each. The current inventory shows that there are 55 tanks. Find the value of the inventory using (a) the FIFO method and (b) the LIFO method. *

$12,175; $16,625

$16,625; $12,175

$12,625; $16,175

Other:

15. Inventory at a local pharmacy was taken five times and was found to be $64,000; $55,480; $66,000; $58,420; and $63,421. Sales during the same period were $260,456. Find the stock turnover at the pharmacy. Round to the nearest cent. *

3.24

2.44

4.24

Other:

16. Barbara Waters signed a simple discount note for $150,000 for 150 days at a rate of 8%.Find (a) the proceeds and (b) the effective interest rate based on the proceeds received by Waters. *

$5,000; 8.28%

$145,000; 8.28%

$500,000; 8.28%

Other:

17. A 100-day simple discount promissory note for $19,400 with a simple discount of 11% was signed on January 28. It was discounted on March 5 at 8%. Find the proceeds at the time of the sale. *

$14,129

$12,419

$19,124

Other:

18. Amount of Each Deposit $2,000, Deposited Quarterly, Rate 6%, Time (Years) 5, Amount of Annuity ___, Interest Earned _____ *

$49,247.34; $9,247.34

$46,247.34; $6,247.34

$46,847.34; $6,847.34

Other:

19. Markup based on Cost= 27.5%, Markup based on Selling Price=______ *

21.57%

37.93%

127.5%

Other