Question :
41.Present and future value tables of 1 at 9% presented : 1412652
41.Present and future value tables of 1 at 9% are presented below.
PV of $1FV of $1PVA of $1FVAD of $1 FVA of $1
10.917431.090000.917431.09001.0000
20.841681.188101.759112.27812.0900
30.772181.295032.531293.57313.2781
40.708431.411583.239724.98474.5731
50.649931.538623.889656.52335.9847
60.596271.677104.458928.20047.5233
How much must be invested now at 9% interest to accumulate to $10,000 in five years?
A.$9,176.
B.$6,499.
C.$5,500.
D.$5,960.
PV = $10,000 × 0.64993* = $6,499
*PV of $1: n = 5; i = 9%
42.Present and future value tables of 1 at 9% are presented below.
PV of $1FV of $1PVA of $1FVAD of $1 FVA of $1
10.917431.090000.917431.09001.0000
20.841681.188101.759112.27812.0900
30.772181.295032.531293.57313.2781
40.708431.411583.239724.98474.5731
50.649931.538623.889656.52335.9847
60.596271.677104.458928.20047.5233
How much must be deposited at the beginning of each year to accumulate to $10,000 in four years if interest is at 9%?
A.$1,671.
B.$2,570.
C.$2,358.
D.$2,006.
$10,000 ÷ 4.9847* = $2,006
*FVAD of $1: n = 4; i = 9%
43.Present and future value tables of 1 at 9% are presented below.
PV of $1FV of $1PVA of $1FVAD of $1 FVA of $1
10.917431.090000.917431.09001.0000
20.841681.188101.759112.27812.0900
30.772181.295032.531293.57313.2781
40.708431.411583.239724.98474.5731
50.649931.538623.889656.52335.9847
60.596271.677104.458928.20047.5233
Claudine Corporation will deposit $5,000 into a money market sinking fund at the end of each year for the next five years. How much will accumulate by the end of the fifth and final payment if the sinking fund earns 9% interest?
A.$32,617.
B.$29,924.
C.$27,250.
D.$26,800.
FVA = $5,000 × 5.9847* = $29,924
*FVA of $1: n = 5; i = 9%
44.Present and future value tables of 1 at 9% are presented below.
PV of $1FV of $1PVA of $1FVAD of $1 FVA of $1
10.917431.090000.917431.09001.0000
20.841681.188101.759112.27812.0900
30.772181.295032.531293.57313.2781
40.708431.411583.239724.98474.5731
50.649931.538623.889656.52335.9847
60.596271.677104.458928.20047.5233
Mustard's Inc. sold the rights to use one of its patented processes that will result in cash receipts of $2,500 at the end of each of the next four years and a lump sum receipt of $4,000 at the end of the fifth year. The total present value of these payments if interest is at 9% is:
A.$10,699.
B.$11,468.
C.$12,100.
D.$14,000.
PVA = $2,500 x 3.23972 (n = 4) =$ 8,099
PV = $4,000 x 0.64993 (n = 5) =2,600
$10,699
45.An investment product promises to pay $42,000 at the end of 10 years. If an investor feels this investment should produce a rate of return of 12%, compounded annually, what's the most the investor should be willing to pay for the investment?
A.$15,146.
B.$13,523.
C.$42,000.
D.$130,446.
$42,000 × 0.32197* = $13,523 (rounded)
*PV of $1: n = 10; i = 12%
46.LeAnn wishes to know how much she should invest now at 7% interest in order to accumulate a sum of $5,000 in four years. She should use a table for the:
A.Present value of 1.
B.Future value of 1.
C.Present value of an ordinary annuity of 1.
D.Future value of an annuity due of 1.
$5,000 × (PV n = 4, i = 7%) = Amount to Invest
47.Present and future value tables of 1 at 11% are presented below.
PV of $1FV of $1PVA of $1FVA of $1
10.900901.110000.900901.0000
20.811621.232101.712522.1100
30.731191.367632.443713.3421
40.658731.518073.102454.7097
50.593451.685063.695906.2278
60.534641.870414.230547.9129
Spielberg Inc. signed a $200,000 noninterest-bearing note due in five years from a production company eager to do business. Comparable borrowings have carried an 11% interest rate. What is the value of this debt at its inception?
A.$200,000.
B.$178,000.
C.$118,690.
D.$222,000.
PV = $200,000 × 0.59345* = $118,690
*PV of $1: n = 5; i = 11%
48.Present and future value tables of 1 at 11% are presented below.
PV of $1FV of $1PVA of $1FVA of $1
10.900901.110000.900901.0000
20.811621.232101.712522.1100
30.731191.367632.443713.3421
40.658731.518073.102454.7097
50.593451.685063.695906.2278
60.534641.870414.230547.9129
On October 1, 2016, Justine Company purchased equipment from Napa Inc. in exchange for a noninterest-bearing note payable in five equal annual payments of $500,000, beginning Oct 1, 2017. Similar borrowings have carried an 11% interest rate. The equipment would be recorded at:
A.$2,500,000.
B.$2,225,000.
C.$1,847,950.
D.$2,115,270.
PVA = $500,000 × 3.69590* = $1,847,950
*PVA of $1: n = 5; i = 11%
49.Present and future value tables of 1 at 11% are presented below.
PV of $1FV of $1PVA of $1FVA of $1
10.900901.110000.900901.0000
20.811621.232101.712522.1100
30.731191.367632.443713.3421
40.658731.518073.102454.7097
50.593451.685063.695906.2278
60.534641.870414.230547.9129
Titanic Corporation leased executive limos under terms of $20,000 down and four equal annual payments of $30,000 on the anniversary date of the lease. The interest rate implicit in the lease is 11%. The first year's interest expense would be:
A.$13,200.
B.$10,238.
C.$33,200.
D.$15,543.
PVA = $30,000 × 3.10245* = $93,074
$93,074 × 11% = $10,238
*PVA of $1: n = 4; i = 11%
50.Present and future value tables of 1 at 11% are presented below.
PV of $1FV of $1PVA of $1FVA of $1
10.900901.110000.900901.0000
20.811621.232101.712522.1100
30.731191.367632.443713.3421
40.658731.518073.102454.7097
50.593451.685063.695906.2278
60.534641.870414.230547.9129
Polo Publishers purchased a multi-color offset press with terms of $50,000 down and a noninterest-bearing note requiring payment of $20,000 at the end of each year for five years. The interest rate implicit in the purchase contract is 11%. Polo would record the asset at:
A.$73,918.
B.$123,918.
C.$130,000.
D.$169,560.
$50,000 + ($20,000 × 3.69590) = $123,918
*PVA of $1: n = 5; i = 11%
