1. You want to buy a new sports car from Muscle Motors for $42,000. The contract is in the form of a 72-month annuity due at a 8.75 percent APR. Required: What will your monthly payment be?
$751.87
$761.36
$746.43
$731.50
$709.11
2. ___ bonds are often called by the firm prior to maturity.
a. Mortgage
b. Corporate
c. Floating rate
d. Callable
e. Municipal
3. You are building a new factory. You bought the land two years ago for $100; you believe that it is now worth $150, but there are no known buyers for the property. The plant will cost $250 to build. You expect to buy $150 of equipment and spend $35 installing it. What is the amount of the initial investment for capital budgeting purposes?
A) $435
B) $500
C) $535
D) $250
E) $585