Answers Included ✅
Chap 01 2025 Release - Brealey
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
1) Mr. Free has $120 in income this year and will have zero income next year. The market
interest rate is 10 percent per year. If Mr. Free consumes $40 this year and invests the rest in
the market, what will be available for his consumption next year?
A) $61
B) $66
C) $88
D) $111
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 2 Medium
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-25 Mr. Free has...
2) Mr. Bird has $120 in income this year and will have zero income next year. The market
interest rate is 10 percent per year. Mr. Bird also has an investment opportunity in which he
can invest $50 today and receive $84 next year. Suppose Mr. Bird consumes $30 this year
and invests in the project. How much will be available for his consumption next year?
A) $106
B) $108
C) $126
D) $128
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 2 Medium
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-26 Mr. Bird has...
1
,3) Ms. Venus has $120 in income this year and will have $144 next year. The market interest
rate is 10 percent per year. Suppose Ms. Venus consumes $60 this year. How much will be
available for her consumption next year?
A) $176
B) $210
C) $226
D) $266
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 2 Medium
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-27 Ms. Venus has...
4) Mr. Thomas has $120 in income this year and will have zero income next year. The market
interest rate is 10 percent per year. Mr. Thomas also has an investment opportunity in which
he can invest $50 this year and receive $76 next year. Suppose Mr. Thomas consumes $50
this year and invests in the project. What will be his consumption next year?
A) $68
B) $73
C) $98
D) $128
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 3 Hard
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-28 Mr. Thomas has...
2
,5) Mr. Dell has $110 in income this year and will have zero income next year. The expected
return from investing in the stock market is 10 percent a year. Mr. Dell also has an
investment opportunity—having the same risk as the market in which he can invest $60 this
year and receive $100 next year. Suppose Mr. Dell consumes $50 this year and invests in the
project. What is the NPV of the investment opportunity?
A) $0
B) $6
C) $40.91
D) none of the options
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 3 Hard
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Net Present Value
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-29 Mr. Dell has...
6) Ms. Delgado has $73,000 in income this year and will have $53,000 next year. The market
interest rate is 10 percent per year. Suppose Ms. Delgado consumes $93,000 this year. How
much will be available for her consumption next year?
A) $31,000
B) $36,500
C) $73,000
D) $83,000
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 3 Hard
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Net Present Value
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-30 Ms. Delgado has...
3
, 7) Ms. Newcastle has $60,000 in income this year and will have $47,000 next year. The market
interest rate is 10 percent per year. Suppose Ms. Newcastle wishes to consume $76,700 next
year. How much will she be able to consume this year?
A) $26,700
B) $33,000
C) $74,700
D) $84,700
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 3 Hard
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-32 Ms. Newcastle has...
8) Mr. Cobb has an income of $48,000 this year and will have $60,000 next year. He can invest
in a project that costs $38,000 this year, which generates an income of $44,000 next year.
The market interest rate is 10 percent. What will be available for his consumption next year if
Mr. Cobb invests in the project and consumes $66,800 this year?
A) $48,000
B) $41,520
C) $76,000
D) $51,520
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 3 Hard
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-33 Mr. Cobb has an income...
4
Chap 01 2025 Release - Brealey
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
1) Mr. Free has $120 in income this year and will have zero income next year. The market
interest rate is 10 percent per year. If Mr. Free consumes $40 this year and invests the rest in
the market, what will be available for his consumption next year?
A) $61
B) $66
C) $88
D) $111
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 2 Medium
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-25 Mr. Free has...
2) Mr. Bird has $120 in income this year and will have zero income next year. The market
interest rate is 10 percent per year. Mr. Bird also has an investment opportunity in which he
can invest $50 today and receive $84 next year. Suppose Mr. Bird consumes $30 this year
and invests in the project. How much will be available for his consumption next year?
A) $106
B) $108
C) $126
D) $128
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 2 Medium
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-26 Mr. Bird has...
1
,3) Ms. Venus has $120 in income this year and will have $144 next year. The market interest
rate is 10 percent per year. Suppose Ms. Venus consumes $60 this year. How much will be
available for her consumption next year?
A) $176
B) $210
C) $226
D) $266
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 2 Medium
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-27 Ms. Venus has...
4) Mr. Thomas has $120 in income this year and will have zero income next year. The market
interest rate is 10 percent per year. Mr. Thomas also has an investment opportunity in which
he can invest $50 this year and receive $76 next year. Suppose Mr. Thomas consumes $50
this year and invests in the project. What will be his consumption next year?
A) $68
B) $73
C) $98
D) $128
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 3 Hard
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-28 Mr. Thomas has...
2
,5) Mr. Dell has $110 in income this year and will have zero income next year. The expected
return from investing in the stock market is 10 percent a year. Mr. Dell also has an
investment opportunity—having the same risk as the market in which he can invest $60 this
year and receive $100 next year. Suppose Mr. Dell consumes $50 this year and invests in the
project. What is the NPV of the investment opportunity?
A) $0
B) $6
C) $40.91
D) none of the options
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 3 Hard
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Net Present Value
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-29 Mr. Dell has...
6) Ms. Delgado has $73,000 in income this year and will have $53,000 next year. The market
interest rate is 10 percent per year. Suppose Ms. Delgado consumes $93,000 this year. How
much will be available for her consumption next year?
A) $31,000
B) $36,500
C) $73,000
D) $83,000
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 3 Hard
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Net Present Value
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-30 Ms. Delgado has...
3
, 7) Ms. Newcastle has $60,000 in income this year and will have $47,000 next year. The market
interest rate is 10 percent per year. Suppose Ms. Newcastle wishes to consume $76,700 next
year. How much will she be able to consume this year?
A) $26,700
B) $33,000
C) $74,700
D) $84,700
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 3 Hard
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-32 Ms. Newcastle has...
8) Mr. Cobb has an income of $48,000 this year and will have $60,000 next year. He can invest
in a project that costs $38,000 this year, which generates an income of $44,000 next year.
The market interest rate is 10 percent. What will be available for his consumption next year if
Mr. Cobb invests in the project and consumes $66,800 this year?
A) $48,000
B) $41,520
C) $76,000
D) $51,520
Question Details
Accessibility : Screen Reader/Keyboard/CC
Bloom's : Apply
Business Competency : Analytical Thinking
Difficulty : 3 Hard
Gradable : automatic
Section : 1-1 Corporate Investment and Financing Decisions
Topic : Investment vs Financing Decision
Source : Chapter 01 Test Bank - Algorithmic > TB MC Qu. 1-33 Mr. Cobb has an income...
4
