Fin 571 Week 1 Connect Lab Questions Latest 2016 Version

Description

  1. A business created as a distinct legal entity is called a:
  2. Which one of these best fits the description of an agency cost?
  3. One disadvantage of the corporate form of business ownership is the:
  4. A partnership:
  5. The primary goal of financial management is to
  6. Which one of the following business types is best suited to raising large amounts of capital?
  7. Accounting profits and cash flows are generally
  8. Gerold invested $115 in an account that pays 5 percent simple interest. How much money will he have at the end of 7 Years
  9. What is the future value of $1,050 a year for 5 years at a 7 percent interest
  10. What is the future value of $3,244 invested for 10 years at 5.00 percent compounded annually
  11. First City Bank pays 7 percent simple interest on its savings account balances, whereas Second City Bank pays 7 percent interest compounded annually.   If you made a $59,000 deposit in each bank, how much more money would you earn from your Second  City Bank account at the end of 9 years 
  12. a.Compute the future value of $1,000 compounded annually for 10 years at 7 percent
    b.Compute the future value of $1,000 compounded annually for 10 years at 13 percent 
    c.Compute the future value of $1,000 compounded annually for 15 years at 7 percent
  13. For each of the following, compute the present value (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.):
    Present Value             Years   Interest Rate    Future value
    13        7%                   $ 15,251 
    4          13                    49,557 
    29         14                    884,073 
    40        9                      548,164
  14. Wilkinson Co. has identified an investment project with the following cash flows: 
    Year    Cash Flow
    1          $ 890
    2          1,270
    3          1,530
    4          1,700 

    If the discount rate is 9 percent, what is the present value of these cash flows? 
    If the discount rate is 20 percent, what is the present value of these cash flows?
    If the discount rate is 30 percent, what is the present value of these cash flows?

  15. You own 200 shares of Western Feed Mills stock valued at $36.72 per share. What is the dividend yield if your annual  dividend income is $282?
  16. Suppose a stock had an initial price of $52 per share, paid a dividend of $1.00 per share during the year, and had an ending share price of $62. Compute the percentage total return.
  17. You’ve observed the following returns on SkyNet Data Corporation’s stock over the past five years: 13 percent, –8 percent, 16 percent, 16 percent, and 10 percent. Suppose the average inflation rate over this period was 1.5 percent, and the average Tbillrate over the period was 5 percent 
    a. What was the average real return on the stock
    b. What was the average nominal risk premium on the stock
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SKU: FIN571-021

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