FNAN522 Module 2 Completed Midterm Exam.

FNAN522 Module 2 Completed Midterm Exam. You are viewing a graph that plots the NPVs of a project to various discount rates that could be applied to the project's cash flows. What is the name given to this graph? NPV Profile An investment offers a total return of 12.4 percent over the coming year. You believe the total real return will be only 9.7 percent. What do you believe the exact inflation rate will be for the next year? 2.46 percent The interest rate that is most commonly quoted by a lender is referred to as which one of the following: Simple rate Which one of the following terms is defined as a loan wherein the regular payments, including both interest and principal amounts, are insufficient to retire the entire loan amount, which then must be repaid in one lump sum? Balloon loan You are investing $100 today in a savings account at your local bank. Which one of the following terms refers to the value of this investment one year from now? Future Value What is the net present value of a project that has an initial cash outflow of $36,300 and cash inflows of $11,500, $21,700, $0, and $10,400 in Years 1 through 4, respectively? The required return is 15 percent. ($3945.45) At 6 percent interest, how long would it take to quadruple your money? 23.79 years You just received a $5,000 gift from your grandmother. You have decided to save this money so that you can gift it to your grandchildren 50 years from now. How much additional money will you have to gift to your grandchildren if you can earn an average of 7.5 percent instead of just 7 percent on your savings? $38,663.60.