# FIN 571 Wk 3 - Practice: Wk 3 Practice Questions

PLDZ-16180 Free In Stock
\$ 0.00 USD
Description

http://www.onlinehelp123.com/fin-571

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

http://www.onlinehelp123.com/fin-571

# FIN 571 Wk 3 - Practice: Wk 3 Practice Questions

"Give me \$5,000 today and I'll return \$10,000 to you in 5 years," offers the investment broker. To the nearest percent, what annual interest rate is being offered?

Multiple Choice

•      12.29%
•      13.67%
•      14.87%
•      12.84%

If \$120,000 is borrowed for a home mortgage, to be repaid at 9% interest over 30 years with annual payments of \$11,680.36, how much interest (as opposed to return of capital) is paid in the last year of the loan?

Multiple Choice

•      \$918.25
•      \$942.51
•      \$978.43
•      \$964.43

What is the relationship between an annually compounded rate and the annual percentage rate (APR) which is calculated for truth-in-lending laws for a loan requiring monthly payments?

Multiple Choice

•      The APR is lower than the annually compounded rate.
•      The APR is higher than the annually compounded rate.
•      The APR equals the annually compounded rate.
•      The answer depends on the interest rate.

For mutually exclusive projects, the IRR can be used to select the best project:

Multiple Choice

•      by calculating the modified internal rate of return.
•      by calculating the IRR based on incremental cash flows.
•      by using the discount rate to calculate the IRR.
•      never. IRR cannot be utilized for mutually exclusive projects.

Firms that make investment decisions based on the payback rule may be biased toward rejecting projects:

Multiple Choice

•      with short lives.
•      with long lives.
•      with late cash inflows.
•      that have negative NPVs.
Tags
Recent Reviews Write a Review
0 0 0 0 reviews