Dr. Stein has just invested $10,000 for his son (age 7). The money will be used for his son's education 15 years from now. He calculates that he will need $100,000 for his son's education by the time the boy goes to school. What rate of return will Dr. Stein need to achieve this goal?

Multiple Choice

• Between 9% and 10%

• Between 16% and 17%

• Between 10% and 11%

• Between 15% and 16%

Football player Walter Johnson signs a contract calling for payments of $250,000 per year, to begin 10 years from now and then continue for five more years. To find the present value of this contract, which table or tables should you use?

Multiple Choice

• The future value of $1

• The future value of an annuity of $1 and the future value of $1

• The present value of an annuity of $1 and the present value of $1

• none

Assume a corporation has earnings before depreciation and taxes of $95,000, depreciation of $30,000, and that it has a 35 percent tax bracket. What are the after-tax cash flows for the company?

Multiple Choice

• $76,050

• $67,050

• $72,250

• $76,850

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