DIRECTIONS: Choose the BEST answer to each question and place your selection on the answer sheet 1. Which of the following transactions would require the use of the present value of an annuity due concept in order to calculate the present value of the asset obtained or liability owed at the date of incurrence? a. A capital lease is entered into with the initial lease payment due upon the signing of the lease agreement b. A capital lease is entered into with the initial lease payment due one month subse- quent to the signing of the lease agreement C. A ten-year 8% bond is issued onJanuary 2 with interest payable semiannually on July 1 and January 1 yielding 7%. d. A ten-year 8% bond is issued on January 2 with interest payable semiannually on July 1 and January 1 yielding 9%. 2. What best describes the time value of money? a. The interest rate charged on a loan b. Accounts receivable that are determined uncollectible c. An investment in a checking account. d. The relationship between time and money. 3. What is NOT a variable that is considered in interest computations? a. Principal. b. Interest rate. c. Assets. d. Time. Which factor would be greater-the present value of $1 for 10 periods at 8% per period or the future value of $1 for 10 periods at 8% per period? 4. Present value of $1 for 10 periods at 8% per period. a. b. c. d. Future value of $1 for 10 periods at 8% per period. The factors are the same. Need more information. Which table would you use to determine how much you would need to have deposited three years ago at 10% compounded annually in order to have $1,000 today? ra. Future value of 1 or present value of 1 b. Future value of an annuity due of 1 c. Future value of an ordinary annuity of 1 d. Present value of an ordinary annuity of 1 5. Which table would you use to determine how much must be deposited now in order to provide for 5 annual withdrawals at the beginning of each year, starting one year hence? a. Future value of an ordinary annuity of 1 b. Future value of an annuity due of 1 c. Present value of an annuity due of 1 d., Present value of an ordinary annuity of 1 6