FINC 5310

1. A 3-year project is expected to produce a cash flow of $82,400 in the first year and $148,600 in the second year. The project has a present value of $303,764.34 at a discount rate of 12.75 percent. What is the expected cash flow in the third year of the project? A. $164,400 B. $163,800 C. $163,700 D. $163,100 E. $164,900 - Correct Answer-D QUESTION 2 A credit card compounds interest monthly and has an effective annual rate of 12.67 percent. What is the annual percentage rate? A. 11.93% B. 11.99% C. 12.00% D. 11.87% E. 12.35% - Correct Answer-B QUESTION 3 A small craft store located in a kiosk expects to generate annual cash flows of $6,800 for the next three years. At the end of the three years, the business is expected to be sold for $15,000. What is the value of this business at a discount rate of 15 percent? A. $25,388.67 B. $30,100.07 C. $17,409.09 D. $19,477.67 E. $29,408.27 - Correct Answer-A QUESTION 4 An annuity stream of cash flow payments is a set of: A. arbitrary cash flows occurring each time period for no more than 10 years. B. increasing cash flows occurring at set intervals of time that go on forever. C. either equal or varying cash flows occurring at set intervals of time for a fixed period. D. equal cash flows occurring each time period over a fixed length of time. E. equal cash flows occurring each time period forever. - Correct Answer-D