23) At al walue of i) sin or 56.75 57,01 . S>03 tone lcule inter 2) Which of the following statements is false? A) The process of moving a value or cash flow backward in time is known as discounting. B) FV=(1+r)nC C) The process of moving a value or cash flow forward in time is known as compounding. D) The value of a cash flow that is moved forward in time is known as its future value. E) None of above. 3) Which of the following statements is false? A) The process of moving a value or cash flow forward in time is known as compounding. B) The effect of eaming interest on interest is known as compound interest. C) It is only possible to compare or combine values at the same point in time. D) A dollar in the future is worth more than a dollar today. E) None of them Cash is a Long-term Asset. Current Asset. Current Liability. Long-term Liability. Jone of them 1) Which of the following statements is FALSE? A) Future value and prosent valoe are same. b) When a bond trades at a prioe equal to its face value it is said to trade at par. 0 As interest rates and bond yield rise, bond prioes will fall. D) A timeline is a linear representation of the timing of the (expected) cash flows. B) None of above 19) The FOICMULAS A) heliwn on invertment B) Retum or aeter C) Curileve the nem's divident o) constent dividand wrow th madol niecid leat ratlo 21) A so vear mortgate lose is a A) Cong-term Llability. D) Current Lablity C) Current Asser. D) Long-ferm Asset. e) None 22) At an annual interest rate of 7%, the future value of $3,000 in five years is elosest to: A) 54,207 B) 56,750 C) 57.015 D) 57,0,55 E) None 23) Calculate present value of perpetuity that pays 8110 in interest each year and 5% interest rate. A) 61000 B) 61100 C) $2100 D) 62000 E) 82200 PV=PV(1+i)2nPV=D2n PV=PV/C+DVNPVofanannuity=C=r1(1(1+r)N1)PVofaperpetuity=rC PV of a growing perpetuity =rgC 1+EAR=(1+kAPR)k 24) An investment is said to be liquid if the investment A) has large day to day fuctuations in price. B) has a large bid-ask spread. C) can easily be converted into cash. D) is traded on a stock exchange. E) None 25) Interest paid (earned) on both the original principal borrowed (lent) and previous interest earned is often referred to as A) Compound Interest B) Partnership C) Present value D) Simple Interest E) None 11) Which of the following statements is falso? A) The process of moving a value or cash flow backward in time is known as discounting. B) FV=(1+r)nc C) The process of moving a value or cash flow forward in time is known as compounding. D) The value of at eash flow that is moved forward in time is known as its future value. E) None of above. 12. Af an annual interest rate of 7%, the future value of $3,000 in five years is closest to: A) $4,207 B) $6,750 C) $7,015 D) 57,035 E) None 13) To increase a given future value, the discount rate should be adjusted A) upward B) downward c) first upward and then downward D) Forcasting E) None 14) In 2 years you are to receive $10,000. If the interest rate were to suddenly decrease, the present value of that future amount toyou would A) fall B)rise C)remain unchanged D)The correct answer cannot be detertnined without more infortation: B) fall by is\% 15) At an annual interest rate of 7%, the present value of $5,000 received in five years is closest to: A) $3,565 B) $6,750 C) $7,015 D) $7,035 B) $1,035 16) Which of the following statements regarding the timeline is fake? A) Oate 2 is 2 year from now B) The $5000 below date 2 is the payment you will recelve at the end of the SECOND year. C) The $5000 below date 2 is the payment you wint receive at the beginning of the second year. D) Date 0 represents today. E) None of above 17) Which of the following statements regarding the timeline is false? A) Date 1 is the end of the first year. B) Date 0 is the beginning of the first year. C) The space between date 0 and date 2 represents the time period between two specific dates. D) You will find the timeline most useful in tracking. cash flows if you interpret each point on the timeline as a period or interval of time. E) None of above 18) is the business function that deals with investing the avallable financial resources in a way that greater business success and return-oninvestment (ROI) is achioved. A) Operating Officer. B) Marketing manager C) Financial management D) HRM E) None 19) A financial statement that reports a company's assets, liabilities, and shareholder equity at a specific point in time A) Income statement B) ROA C)Maturity date D) Mortgage rate, E) Balance sheet
