What is the future value of a five-year ordinary annuity with annual payments of $200, evaluated at a 15 percent interest rate? (4 points)

2. What is the present value of a $100 lump sum to be received in five years if the opportunity cost rate is 10 percent? (4 points)

3. What is the future value of a $100 lump sum invested for five years in an account paying 10 percent interest? (4 points)

4. You buy a six-year, 8 percent savings certificate for $1,000. If interest is compounded annually, what will be its value at maturity? (5points)

5. You buy a six-year, 8 percent savings certificate for $10,000. If interest is compounded semiannually, what will be its value at maturity? Explain the effect that cause the ending balance to either increase or decrease (4 point)

6. Discuss the impact on the present value (PV) of a future lump sum as either the discount rate or the number of compounding periods per year increases. (4points)

7. An investment opportunity promises a stated interest rate of 6 percent, with semiannual compounding. Compute the effective annual rate, and indicate whether or not the EAR is less or greater (4points)

8. You have been selected by the Board of Directors of Triangle Pediatrics as the CEO of this multi-clinic's organization. Upon review of the

Financials, you realized the clinic has $ 300,000.00 in a checking collecting near zero interest. You have multiple investment alternatives that pay interest as indicated in a. through e. below. Which alternative will yield the most money at the end of two year? (10 points)

a. 10 percent interest, compounded annually

b. 9.9 percent interest, compounded semiannually

c. 9.9 percent interest, compounded monthly

d. 9.5 percent interest, compounded quarterly

e. 9 percent interest, compounded daily

9. You received a pre-approved credit card from HSBC Bank, LLC. The bank quoted APR is 18%. Monthly payments are required. What is the actual interest rate you are paying on such a credit card per month? What is the EAR (effective annual rate) (4points)?

10. You are the new CEO of Triangle Pediatrics and two weeks after you started in your new position the Chief Financial Officer and Associate PV of Finance left for greener pasture. The parent of one of the clinics' patient who owed $10,000 and the account is 180 days past due approaches you and requests a 5 year-5 payments plan. She agreed to pay 14% APR. Prepare an amortization plan for her. Indicate the annual payment amount. How much would she pay in total interest? (5 points)

11. The new CEO of George Washington Hospital a for profit hospital wants to increase efficiency of GWH data processing operations. She decides to acquire a computer system that would reduce the hospital collection by five days among other benefits. The computer system cost $2,700,000 and spent $241,175 to renovate a building to accommodate the new equipment. The useful life of the computer system is estimated to be eight years and the computer residual value is $100,000.00. Using straight line depreciation method. Calculate GWH yearly depreciation on that equipment. What would be the book value after year 5? (5 points)

12) The new CEO of George Washington Hospital a for profit hospital wants to increase efficiency of GWH data processing operations. She decides to acquire a computer system that would reduce the hospital collection by five days among other benefits.The computer system cost $2,700,000 and spent $241,175 to renovate a building to accommodate the new equipment. The useful life of the computer system is estimated to be 7 years and the computer residual value is $100,000.00. Using Modified Accelerated Cost Recovery System (MACRS) method. What is year 3 depreciation expense? What is year 4 accumulated depreciation? What would be the book value after year 4? (10 points)

13) ) The new CEO of George Washington Hospital a for profit hospital wants to increase efficiency of GWH data processing operations. She decides to acquire a computer system that would reduce the hospital collection by five days among other benefits.The computer system cost $2,700,000 and spent $241,175 to renovate a building to accommodate the new equipment. The useful life of the computer system is estimated to be 7 years and the computer residual value is $100,000.00. Using Double Declining Depreciation method. What is year 3 depreciation expense? What is year 4 accumulated depreciation? What would be the book value after year 4? (10 points)

14) Compare the three depreciation methods # (11- 12- 13) and indicate which method would yield the most accumulated depreciation (tax savings) at the end of the fourth year? (3 points)

15) List the four fundamental factors that affect the supply of and demand for investment capital. Explain in detail how each of these factors affect the cost of money. (4points)

16) What are the tree main bond rating agencies? What is the difference between Aaa-rated bond, BBB and a CCC rated bond? Which one caries more risk? (4 points)

17) Do the interest rate on Treasury securities include a default risk premium? A liquidity premium? A price risks premium? Explain your response. (4 points)

18) Explain how to calculate a bond value "price". (4points)

19) Discuss in detail the relationship between market interest and bond price (4 points)

20) You are the newly hired Administrator for an outpatient clinic. You estimate that the clinic will need about $800,000 to add a new wing in 5 years. The board informed you that the clinic currently has $350,000 in a saving account, for that project. Assuming, you could invest this money at 15% annual interest. Would you have enough to meet your goal? if not, how much would you need to complete the project? (5 points)

21) The Board of Broward General Hospital made a decision to raise $50M by issuing bonds for the construction of a new critical care tower. Some of the middle management staff are concern, they do not understand how the bond market works. As a Senior Business Analyst, you are asked to present a fifteen minutes Power Points presentation to the group at the next Department Leader's meeting about the fundamentals of US bond market. Explain how each of the following affects a bond financial value (10points)

RRF (Real Risk-Free Rate)

IP (Inflation Premium)

DRP (Default Risk Premium)

LP (Liquidity Premium)

PRP (Price Risk Premium)

CRP (Call Risk Premium)

The relationship between interest rate and Bond price

Par Value of a Bond

What happen to a bond price when the bond is sold at a discount or at a premium?

How and in what way the ranking of the hospital credit could affect its access to capital.

Maturity date

Coupon rate

New issues versus outstanding bonds

22) Assume Broward General Hospital (BGH) issued bonds that have a ten-year maturity, a 12% coupon rate with annual payment, and $1,000 par value. (5points)