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n So you can retire early, you have decided to start saving $500 a month starting one now. You plan to retine as soon as you can accumulate $I millson f you can ea savings, how many years will in be before you can retire? A) 33.87 years B) 44 71 years42.87 years D 33.39 years E) 44.76 years 10) You have just won the lottery' You can either receive $6,500 a year for 20 years or $100,000 as lump sum payment today. What is the interest rate on the annuity option A) 2.64 percent B) 1.95 percent C) 2.45 percent D) 2.20 percent 1) 1.68 percent i) Assume the total cost of a college education will be $325,000 when your child enters college in 16 years. You presently have $40,000 to invest and do not plan to invest anything further. What annual rate of interest must you earn on your investment to cover the entire cost of your child's college education? A) 13.99 percent B) 10.40 percent C) 12.65 percent D) 14.62 percent E) 11.08 percent 12) Which statement is true? A) All else equal, an ordinary annuity is more valuable than an annuity due. B) All else equal, a decrease in the number of payments increases the future value of an annuity Q All else equal, an increase in the number of annuity payments decreases the present value and E) All else equal, an increase in the discount rate decreases the present value and increases the future due. increases the future value of an annuity An annuity with payments at the beginning of each period is called an ordinary annuity value of an annuity 13) Rooster's currently has S5,200 in cash. The company owes $31.700 to suppliers for merchandise and $41,500 to the bank for a long-term loan. Customers owe the company $26,400 for their purchases. The inventory has a book value of $53,300 and an estimated market value of $56,500. If the store compiled a balance sheet as of today, what would be the book value of the current assets? A) $46,800 B) $55,600 C) $64,700 D) $96,500 E) $84,900 14) Which of the following corporate financial decisions answer the question "What long-term investments should the firm take on"? A) Dividend Policy C) Working Capital Management B) Capital Structure D) Capital Budgeting 15) Roseanne wants to borrow $60,000 for a period of 5 years, she will pay the least interest under which of the following methods? (assume 5% annual interest) A) interest only B) pure discount C) principal only D) amortized loan A-2