HIGHLIGHT ANSWERS

C. $4,000,000 D. $2,857,143 9. Assume your firm has an unused machine that originally cost $75,000, has a book value of $20,000, and is currently worth $25,000. Ignoring taxes, the correct opportunity machine in capital budgeting decisions is: A. $20,000 B. $25,000 C. $75,000 D. $5,000 cost for this 10. An example of liquid assets would be: A. finished goods. B. company cars. C. buildings. D. fixed assets. 11. Assume the total expense for your current year in college equals $20,000. Approximately how much would your parents have needed to invest 21 years ago in an account compounded annually to cover this amount? A. $3,973.00 B. $1,600.00 C. $952.00 D. $1,728.00 paying 8% 12. What is the rate of return for an investor who pays $1,054.47 for a 3-year bond with a 7% coupon and sells the bond 1 year later for $1,037.19? A. 7.00% B. 5.00% C. 5.33% D. 6.46% ing $20 000 generates cash inflows of $9,000 annually for the first 3 years, t thic nrniect has