Question 1-TVM, Finding I/Y [2 points]: Martell Corporation's 2012 sales were $10 million. Sales were $6 million five years earlier. To the nearest percentage point, at what rate have sales grown? N: 5 PMT: -6 PV: 10 FV:0 I/Y: ?=52.80 Question 2 - PV, Ordinary Annuity [2 points]: Find the present value of the following ordinary annuities: a) $300 per year for 10 years at 10 percent interest rate N: 10 I/Y: 10 PMT:300(-) PV:? PV=1,843.37 b) $100 per year for 5 years at 5 percent interest rate N: 5 I/Y:5 PMT: 100(-) PV: ? 432.95 Question 3 - PV, Annuity Due [2 points]: Find the present value of the following annuities due: a) $300 per year for 10 years at 10 percent interest rate PV=1,843.37 b) $100 per year for 5 years at 5 percent interest rate PV=432.95 Question 4-Uneven Cash Flow [2 points): Express Airlines is considering the purchase of an aircraft to supplement its current fleet. In estimating the impact of adding this aircraft to the fleet, management has developed the following expected cash flows: Year 1 2 3 4 Cash Flow - $ 1,000 N: 1, I/Y: 10, PMT: 0, FV: 1,000, PV: ?, PV=-909.09 $10,000 N: 2, I/Y: 10, PMT: 0, FV: 10,000, PV: ?, PV= 8,264.46 $10,000 N: 3, I/Y: 10, PMT: 0, FV: 10,000, PV: ?, PV=7,513.15 $10,000 N: 4, I/Y: 10, PMT: 0, FV: 10,000, PV: ?, PV=6,830.13 5 $20,000 N: 5, I/Y: 10, PMT: 0, FV: 20,000, PV: ?, PV= 12,418.43 6 $20,000 N: 6, I/Y: 10, PMT: 0, FV: 20,000, PV: ?, PV= 11,289.48 7 -$30,000 N: 7, I/Y: 10, PMT: 0, FV: -30,000, PV: ?, PV=-15,394.74 If the discount rate is 10 percent, what is the present value of these estimated flows? Question 5 - PV, Lump Sum, Compounding [2 points]: Find the present value of $600 due in five years under each of the following conditions: a) 12 percent simple rate, compounded annually: 340.46 N: 5, I/Y: 12, PMT: 0, FV: 600 b) 12 percent simple rate, compounded semiannually: 335.04 N: 10, I/Y: 6, PMT: 0, FV: 600 c) 12 percent simple rate, compounded quarterly: 332.21 N: 20, I/Y: 3, PMT: 0, FV: 600 d) 12 percent simple rate, compounded monthly: 330.27 N: 60, I/Y: 1, PMT: 0, FV: 600 Question 6 - PV, Ordinary Annuity, Compounding [2 points]: Find the present value of the following ordinary annuities: a) PV of $300 each six months for five years at a simple rate of 12 percent, compounded semiannually. 2208.03 N: 10, I/Y: 6, PMT: 300, FV: 0, PV:? b) PV of $150 each three months for five years at a simple rate of 12 percent, compounded quarterly, 2231.62 : 20, IY: 3, PMT: 150, FV: 0, PV: ? Question 7 - TVM, Compounding, Finding PMT [2 points]: Sue wants to buy a car that costs $20,000. She has arranged to borrow the total purchase price of the car from her credit union at a simple interest rate equal to 12 percent. The loan requires quarterly payments for a period of five years. If the first payment is due in three months (one quarter) after purchasing the car, what will be the amount of Sue's quarterly payments on the loan? 1,344.31 N: 20, I/Y: 3, PMT: ?, PV: 20,000, FV: 0 Question 8 - TVM, Finding N [2 points]: While Steve Bouchard was a student at the University of Florida, he borrowed $20,000 in student loans at an annual interest rate of 6.4 percent. If Steve repays $1,800 per year, how long, to the nearest year, will it take him to repay the loan? 20 Years N: ?, I/Y: 6.4, PMT: -1,800, PV: 20,000, FV: 0 2 Question 9-r... versus [2 points]: The First City Bank pays 6.6 percent interest, compounded annually, on time deposits. The Second City Bank pays 6.5 percent interest, compounded monthly. Based on effective interest rates, in which bank would you prefer to deposit your money? 6.7% (1+0.65/12) 12-1=1.0670-1.067-6.7% Question 10 - versus [2 points]: Krystal Magee invested $150,000 18 months ago. Currently, the investment is worth $179,422. Krystal knows the investment has paid interest every month, but she doesn't know what the yield on her investment is. Help Krystal. Compute both the annual percentage rate (APR), I, and the effective annual rate (EAR), N: 18, PMT: 0, PV: -150,000 I/Y: ?, FV: 179,422, I/Y:19.61 (1-12/1) 1-1-12 1% 12-12% APR n-