You are considering the purchase of a small income-producing property for $150,000 that is expected to produce the following net cash flows:

End of the year	Cash Flow
1	$50,000
2	$50,000
3	$50,000
4	$60,000

What is the internal rate of return (IRR) on this investment?

14.29%

14.51%

14.90%

22.56%

How much will a $100 deposit made today be worth in 10 years if interest is compounded quarterly at an annual rate of 10%?

$200

$259.37

$268.51

$271.79

Franklin Corporation is expected to pay a dividend of $1.25 per share at the end of the year (D1 = $1.25). The stock sells for $32.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at a constant rate, g, forever. What is g?

6.01%

6.17%

6.33%

6.65%

You plan to borrow some money from a bank account. Which of the following banks provides you with the lowest effective rate of interest?

Bank 1; 6.1% with annual compounding.

Bank 2; 6.0% with monthly compounding.

Bank 3; 6.0% with quarterly compounding.

Bank 4; 6.0% with daily (365-day) compounding.

A 10-year bond with a 7% annual coupon has a yield to maturity of 8%. Which of the following statements is CORRECT?

The bond is selling at its par value.

The bond is selling at a premium.

If the yield to maturity remains constant, the bond's price one year from now will be lower than its current price.

If the yield to maturity remains constant, the bond's price one year from now will be higher than its current price.