Need help answering these MCQ's

1- Peter Smith took out a $34,000 bank loan to help purchase his dream car. The bank offered Peter a five-year loan at an interest rate of 6% per annum. The loan will feature monthly payments and monthly compounding of interest. Suppose that Peter would like to pay off the remaining balance on his car loan at the end of the third year (i.e. after 36 payments). What is the remaining balance on the car loan after the third year?

Select one:

a. $12,171

b. $10,469

c. $11,400

d. $14,831

2- Which of the following statements is true?

Select one:

a. In an ordinary annuity, payments occur at the end of each period.

b. In an annuity due, payments occur at the end of each period.

c. A perpetuity will mature at some point in the future.

d. One cannot calculate the present value of a perpetuity.

3- Last National Bank offers a term deposit paying 8% interest (compounded annually). If you invest $5000, how much will you have at the end of year 6?

Select one:

a. $712.99

b. $5,800.80

c. $6,402.55

d. $7,934.27

4- Suppose you wish to invest $1,000. You are asked to choose between a four-year investment that pays 10% compound interest and a similar investment that pays 11.5% simple interest. Which investment will you choose?

Select one:

a. They offer the same result

b. The 11.5% simple interest investment

c. There is not enough information to answer the question

d. The 10% compound interest investment

5- What is the future value of a five-year ordinary annuity with annual payments of $250, evaluated at a 15% interest rate

HINT: Use Future value of an annuity formula

Select one:

a. $670.44

b. $838.04

c. $1250.00

d. $1685.60

6- What is the objective of the capital budgeting function?

Select one:

a. To measure performance, assess risk and to allocate scarce resources

b. To select the best projects in which to invest the companys funds based on expected risk and return

c. To provide the necessary information to managers and supervisors to help them to discharge their functions of organising, planning, control and decision making

d. To provide useful information for financial decision making

7- You are planning your retirement, and have come to the conclusion that you need to save $1,300,000 in 30 years. You can invest in a superannuation fund that guarantees you a 6% return. How much do you have to put into your account at the end of every month to reach your retirement goal?

HINT: Use FV of an annuity formula and set i = 6%/12. You need to solve for PMT.

Select one:

a. $1567.86

b. $2526.27

c. $1294.16

d. $1501.94

8- In the equation below, what does 100 represent?

$75.13 = $100/(1 + 0.1)³

Select one:

a. The number of periods before the cash flow is to be received

b. The discount rate for the future cash flow

c. The future value of a cash flow to be received at a later date

d. The present value of a cash flow to be received at a later date

9- Which of the following is a weakness of a sole proprietorship?

Select one:

a. Limited access to capital

b. Unlimited life

c. Limited liability

d. Easy to form