Monday, February 25, 2013

Chapter 5 Questions

Lulu Carrizales

Chapter 5 Questions.

  1. Net Present Value is used to analyze the profitability of an investment or project. (T/F)
  2. An annuity and an annuity due have all the same components. (T/F)
  3. A Perpetuity is a payment that does not stop (T/F)
  4. An Annuity is the exact same payment over a finite period of time. (T/F)
  5. "IRR" stands for Interior Return Rate (T/F)
  6. The difference between an Annuity and an Annuity Due is:
    a)  At which point in the period that they payment is due (beg. or end)
    b)  The payment amount
    c)  Both a and b
    d)  None of the above.
  7. If you lend someone $10,500 with a 10% interest rate over 5 years, how much would your FV be?

    a)  16,900
    b)  15,910
    c)  16,910
    d)  15,900
  8. A ______ payment is taken in lieu of reoccurring payments that would usually be received over a period of time.

    a)  annuity
    b)  perpetuity
    c)  lump sum
    d)  None of the above.
1.  T
2.  F
3.  T
4.  T
5.  F
6.  A
7.  C
8.  C

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