1) Which of the following statements most accurately represents our discussion on the role of a corporation?
Group of answer choices
Minimizing costs is most important
Maximizing sales is most important
Maximizing profits is most important
Maximizing shareholder value is most important
2) You want to have $1 million 30 years from now. Assuming a 10% rate of return, how much do you have to invest today in a single lump sum in order to get the $1 million?
Group of answer choices
$32,405
$6,082
$85,298
$57,309
3) You are trying to choose between two investments:
A—Invest $2,400 per year for 10 years, earning an 8% annual rate of interest.
OR
B—Invest $200 per month for 10 years, earning an 8% annual rate of interest.
Which of the following is most correct?
Group of answer choices
There is no way to tell which investment has the higher future value.
Investments A and B have identical future values.
Investment B has the higher future value.
Investment A has the higher future value.
4) How much must you invest per month in order to have $1 million 20 years from now? Assume a 9.5% annual rate of interest with monthly compounding.
Group of answer choices
$527
$150,692
$29,294
$1,405
5) Given a payment of $3,000 per year for 20 years and a 7% annual discount rate, what is the present value?
Group of answer choices
$31,782
$3,000
$64,443
$40,219
6) How much can you borrow if you are willing to make payments of $1,190.50 per month (at 6% annual rate) for 30 years?
Group of answer choices
No solution. Cannot compute this.
$150,000
$133,433
$198,565
7) You wish to have $1,000,000. You will invest $600 per month, earning 8% per year. How many months until you reach $1 million in total value?
Group of answer choices
No solution
375
358
180
8) Assume a home mortgage of $200,000, with an interest rate of 5.5% for 30 years (monthly payments). If you pay an extra $300 per month towards the principal of the loan, how many months will it be until you pay off the loan?
Group of answer choices
269
223
214
188