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: