Finance Essay

714 Words Sep 22nd, 2014 3 Pages
Question 1
When you retire 40 years from now, you want to have \$1.2 million. You think you can earn an average of 12 percent on your investment. To meet your goal, you are trying to decide whether to deposit lump sum today, or to wait and deposit a lump sum 2 years from today. How much more will you have to deposit as a lump sum if you wait for 2 years before making the deposit?

A)\$1414.14 B)\$2319.47 C)\$2891.11 D)\$3280.78 E)\$3406.78

Question 2
Samantha opened a savings account this morning. Her money will earn 5 percent interest, compounded annually. After five years, her savings account will be worth \$5000. Assume she will not make any withdrawals. Given this, which one of the following statements is true?

A) Samantha
His holdings are now worth \$598100. What is his annual rate of return on this stock?

A) 14.13% B) 14.24% C) 14.29% D) 14.37% E) 14.68%

Question 7
You are comparing two investment options that each pay 5 percent interest, compounded annually. Both options will provide you with \$12000 of income. Options A pays three annual payments starting with \$2000 the first year followed by two annual payments of \$5000 each. Option B pays three annual payments of \$4000 each. Which one of the following statements is correct given these two investment options?

A) Both options are of equal value given that they both provide \$12000 of income
B) Option A has the higher future value at the end of year three
C) Option B has a higher present value at time zero than does option A
D) Option B is a perpetuity
E) Option A is an annuity

Question 8
You just won a national sweepstakes! For your prize, you opted to receive never0ending payments. The first payment will be \$12500 and will be paid one year from today. Every year thereafter, the payments will increase by 3.5 percent annually. What is the present value of your prize at a discount rate of 8 percent?

A)\$166666.67 B)\$248409.19 C)\$277777.78 D)\$291006.12 E)\$300000.00

Question 9
Southern Tours is considering

Related Documents

• Essay The World Of Finance And Finance

The world of finance first attracted my attention during my 3rd year of my undergraduate degree. I was fortunate enough to have been selected to represent my school at the Rotman International Trading Competition. Once arrived in Toronto, I could not get over the caliber and intensity that the other students demonstrated, the state of the art finance lab and the vast array of resources available to U of T students. Having ever only studied the finance theories and never having to use them in a practical…

Words: 785 - Pages: 4
• Essay Finance

n = 6.99yrs P3-10) - Liliana Alvarez’s employer offers its workers a two-month paid sabbatical every seven years. Liliana, who just started working for the firm, plans to spend her sabbatical touring Europe at an estimated cost of \$25,000. To finance her trip, Liliana plans to make six annual end-of-year deposits of \$2,500 each, starting this year, into an investment account earning 8% interest. A). - Will Liliana’s account balance at the end of seven years be enough to pay for her trip?…

Words: 1048 - Pages: 5
• Essay on Finance

accounting, consult your accounting instructor for more information). Finance: The financial manager or consultant places primary emphasis on decision making. It uses the financial statements prepared by accountants to make decisions about the firm’s financial condition and to advise others about possible losses and profits. In some cases, finance is more a type of leadership position. A financial manager has to deal not only with finance, but also with economics, accounting, statistics, math, and management…

Words: 628 - Pages: 3
• Finance Essay

WHARTON on... Global Finance ............... http://executiveeducation.wharton.upenn.edu http://knowledge.wharton.upenn.edu Global Finance: Looking Back, and Ahead The world is undergoing the worst financial crisis in decades. Although the global credit crunch was sparked by the bursting U.S. housing bubble, one of the most important causes was more basic: For too long, spending in the United States has outpaced incomes. This fundamental mismatch was supported temporarily by an extremely…

Words: 8371 - Pages: 34
• Essay Corporate Finance : The Overlooked Finance Career

Corporate Finance: The Overlooked Finance Career Corporate finance has been overlooked as a secondary choice for an undergraduate finance major that wasn’t able to break into Wall Street. Until recently, the reputation of holding a corporate finance job was not as prestigious as an investment-banking resume. In this paper, my objective is to enlighten the reader on the career paths of an entry-level corporate finance analyst and why I decided that corporate finance is the right path for…

Words: 827 - Pages: 4
• Essay Finance

Corporate Finance: Theory & Practice 25557 Assignment 1) What are the appropriate costs of capital for the GPS transmitter and surveillance aircraft projects? The cost of capital is used to discount the expected cash flow of a proposed project to its present value to make an evaluation of whether to proceed or drop out the project. Normally, a company cost of capital or WACC is used as the discount rate for projects. However, as WACC represents the average rate of return demanded by investors in…

Words: 1499 - Pages: 6
• Essay Notes On Finance And Finance Theory

Assessment 1 – Case Study (Individual) The role of finance is explained through the analyzing of financial to distinguish the different of finance theories. Finance theory including studying the different ways via individuals raise funds and businesses, spend those funds in the most profitable ways, and invest the excess in portfolios that reap the best return while keeping in check the risk factor. Therefore, the biggest challenges that finance faced is how to invest the funds to generate the required…

Words: 1932 - Pages: 8
• Essay Healthcare Finance

HEALTHCARE FINANCE Student name Healthcare Finance course code April 28, 2011 Healthcare Finance Problem 5.1 Break-even analysis helps to plan and control business by showing break-even point, net profit and net loss areas. As it is mentioned in the graph below, on the break-even point cost is equal to revenue which means there is neither loss nor profit at the intersection of sales line and cost line (Frongello). a) As two graphs are provided in the question; the horizontal…

Words: 1228 - Pages: 5
• Essay Finance in Tesco

borrowed for (1-4) years 1. Sources of Finance There are various sources of Finance for a business which can be categorized as External and Internal sources of Finance. 1.1 Internal sources of Finance: These sources do not require the agreement of any other person, party or organization formally such as retained profits. The directors can use those profits in the company without the permission of shareholders. 1.2 External sources of Finance: These financial sources require the agreement…

Words: 2607 - Pages: 11
• Essay Questions On Finance And Finance

FINANCE AND ACOUNTS DEPRTMENT Each company is carried with a cause of being profitable. Cash or capital being a scare in addition to vital aid in the working of any agency desires to accept prime significance. The financial resources were deliberate and managed in a proper and non-stop manner. As most of the maximum crucial choices of a firm are the ones which relate to finance. Finance & debts from an integral a part of any organisation. proper and clean functioning of this segment could be very…

Words: 1831 - Pages: 8