Question 1. The future value of an annuity is typically used when analyzing
- retirement plans.
- alternative capital budgeting proposals.
- the price of common stock.
- loan amortization schedules.
Question 2. Under which of the following discounting methods will the present value of an investment be the highest, assuming the same annual interest rate?
- Yearly.
- Continuous.
- Quarterly.
- Monthly.
Question 3. What is the value of this 20 year lease? The first payment, due one year from today is $2,000 and each annual payment will increase by 4%. The discount rate used to evaluate similar leases is 9%. (Round to the nearest dollar.)
- $ 39,856
- $ 40,000
- $ 68,000
- $ 24,361
Question 4. Time to attain goal: Elegant Designers have generated sales of $625,000 for the current year. If they can grow their sales at a rate of 12 percent every year, how long will they take to triple their sales? (Round off to the nearest year.)
- 9 years
- 10 years
- 8 years
- 7 years