fin300 EXAMINATION LATEST UPDATE (2025)
COMPLETE QUESTIONS With 100% Verified
Solutions| A+ Grade | Already passed !!
Course: Fin300
1. During 2014, Raines Umbrella Corp. had sales of $790,000. Cost of
goods sold, administratice and selling expenses, and depreciation
expenses were $610,000, $85,000, and $190,000, respectively. In
addition, the company had an interest expenseof $52,000 and a tax rate
of 35 percent. (Ignore any tax carryback or carryforward provisions.)
a.What is Raine's net income for 2014?
b.What is the company's operating cash flow? - ANSWER ✓ a. -147,000
b. 95,000
2. Beatrice invests $1,300 in an account that pays 3 percent simple
interest. How much more could she have earned over a 4-year period if
the interest had compounded annually?
a.$19.21
b.$28.65
c.$25.61
d.$7.16
e.$15.90 - ANSWER ✓ D
,3. Solve for the unknown interest rate in each of the following:
Present Value/Yrs/IR/FV
a. $310/5/__/418
b. $430/19/__/1,553
c. $46,000/20/__/269,914
d. $45,261/30/__/1,285,194 - ANSWER ✓ a. 6.16%
b. 6.99%
c. 9.25%
d. 11.80%
4. Assume the total cost of a college education will be $300,000 when
your child enters college in 18 years. You presently have $57,000 to
invest. What annual rate of interest must you earn on your investment to
cover the cost of your child's college education? - ANSWER ✓ 9.67%
5. At 6.8 percent interest, how long does it take to double your money?
Quadruple? - ANSWER ✓ 10.54, 21.07
6. You have just received notification that you have wont the $3 million
first prize in the Centennial Lottery. However, the prize will be awarded
on your 100thbirthday (assuming
you're around to collect), 78 years from now.What is the present value of
your windfall if the appropriate discount rate is 10 percent? - ANSWER
✓ 1772.11`
,7. Although appealing to more refined tastes, art as a collectible has not
always performed so profitably. During 2003, an auction house sold a
sculpture at auction for a priceof $10,221,500. Unfortunately for the
previous owner, he had purchased it in 1998 at a price of $12,197,500.
What was his annual rate of return on this sculpture? - ANSWER ✓ -
3.47%
8. In March 2012, Daniela Motor Financing (DMF), offered some
securities for sale to the public. Under the terms of the deal, DMF
promised to repay the owner of one of these securities $250 in March
2042, but investors would receive nothing until then. Investors paid
DMF $125 for each of these securities; so they gave up $125 in March
2012, for the promise of a $250 payment 30 years later.
a.Assuming that your purchased the bond for $125, what rate of return
wouldyou earn if you held the bond for 30 years until it maturedwith a
value of $250?
b.Suppose under the terms of the bond you could redeem the bond in
2022. DMF agreed to pay an annual interest rate of .6 percent until that
date. How much would the bond be worth at that time?
c.In 2022, instead of cashing in the bond for its then current value, you
decide to hold the bond until it matures in 2042. What annual rate of
return will you earn over the last 20 years? - ANSWER ✓ a. 2.34%
b. 132.71
c. 3.22%
9. Suppose you are committed to owning a $205,000 Ferrari. If you
believe your mutual fund can achieve a 12 percent annual rate of return
, and you want to buy the car in 9 yearson the day you turn 30, how much
must you invest today? - ANSWER ✓ 73,925.06
10. You are scheduled to receive $19,000 in two years. When you
receive it, you will invest it for six more years at 9.5 percent per year.
Howmuch will you have in eight years? - ANSWER ✓ 32,752.04
11. If you put up $50,000 today in exchange for a 6.75 percent, 14-year
annuity, what will the annual cash flow be? - ANSWER ✓ 5,631.83
12. Your company will generate $65,000 in annual revenue each year
for the next seven years from a new information database. If the
appropriate interest rate is 8.25 percent, what is the present value of the
savings? - ANSWER ✓ 335,539.75
13. You want to have $69,000 in your savings account 13 years from
now, and you're prepared to make equal annual deposits into the account
at the end of each year. If the account pays 7.30 percent interest, what
amount must you deposit each year? - ANSWER ✓ 3,359.85
14. The Maybe Pay Life Insurance Co. is trying to sell you an
investment policy that will pay you and your heirs $40,000 per year
forever. If the required return on this investment is 6.3 percent, how
much will you pay for the policy? - ANSWER ✓ 634,920.63
COMPLETE QUESTIONS With 100% Verified
Solutions| A+ Grade | Already passed !!
Course: Fin300
1. During 2014, Raines Umbrella Corp. had sales of $790,000. Cost of
goods sold, administratice and selling expenses, and depreciation
expenses were $610,000, $85,000, and $190,000, respectively. In
addition, the company had an interest expenseof $52,000 and a tax rate
of 35 percent. (Ignore any tax carryback or carryforward provisions.)
a.What is Raine's net income for 2014?
b.What is the company's operating cash flow? - ANSWER ✓ a. -147,000
b. 95,000
2. Beatrice invests $1,300 in an account that pays 3 percent simple
interest. How much more could she have earned over a 4-year period if
the interest had compounded annually?
a.$19.21
b.$28.65
c.$25.61
d.$7.16
e.$15.90 - ANSWER ✓ D
,3. Solve for the unknown interest rate in each of the following:
Present Value/Yrs/IR/FV
a. $310/5/__/418
b. $430/19/__/1,553
c. $46,000/20/__/269,914
d. $45,261/30/__/1,285,194 - ANSWER ✓ a. 6.16%
b. 6.99%
c. 9.25%
d. 11.80%
4. Assume the total cost of a college education will be $300,000 when
your child enters college in 18 years. You presently have $57,000 to
invest. What annual rate of interest must you earn on your investment to
cover the cost of your child's college education? - ANSWER ✓ 9.67%
5. At 6.8 percent interest, how long does it take to double your money?
Quadruple? - ANSWER ✓ 10.54, 21.07
6. You have just received notification that you have wont the $3 million
first prize in the Centennial Lottery. However, the prize will be awarded
on your 100thbirthday (assuming
you're around to collect), 78 years from now.What is the present value of
your windfall if the appropriate discount rate is 10 percent? - ANSWER
✓ 1772.11`
,7. Although appealing to more refined tastes, art as a collectible has not
always performed so profitably. During 2003, an auction house sold a
sculpture at auction for a priceof $10,221,500. Unfortunately for the
previous owner, he had purchased it in 1998 at a price of $12,197,500.
What was his annual rate of return on this sculpture? - ANSWER ✓ -
3.47%
8. In March 2012, Daniela Motor Financing (DMF), offered some
securities for sale to the public. Under the terms of the deal, DMF
promised to repay the owner of one of these securities $250 in March
2042, but investors would receive nothing until then. Investors paid
DMF $125 for each of these securities; so they gave up $125 in March
2012, for the promise of a $250 payment 30 years later.
a.Assuming that your purchased the bond for $125, what rate of return
wouldyou earn if you held the bond for 30 years until it maturedwith a
value of $250?
b.Suppose under the terms of the bond you could redeem the bond in
2022. DMF agreed to pay an annual interest rate of .6 percent until that
date. How much would the bond be worth at that time?
c.In 2022, instead of cashing in the bond for its then current value, you
decide to hold the bond until it matures in 2042. What annual rate of
return will you earn over the last 20 years? - ANSWER ✓ a. 2.34%
b. 132.71
c. 3.22%
9. Suppose you are committed to owning a $205,000 Ferrari. If you
believe your mutual fund can achieve a 12 percent annual rate of return
, and you want to buy the car in 9 yearson the day you turn 30, how much
must you invest today? - ANSWER ✓ 73,925.06
10. You are scheduled to receive $19,000 in two years. When you
receive it, you will invest it for six more years at 9.5 percent per year.
Howmuch will you have in eight years? - ANSWER ✓ 32,752.04
11. If you put up $50,000 today in exchange for a 6.75 percent, 14-year
annuity, what will the annual cash flow be? - ANSWER ✓ 5,631.83
12. Your company will generate $65,000 in annual revenue each year
for the next seven years from a new information database. If the
appropriate interest rate is 8.25 percent, what is the present value of the
savings? - ANSWER ✓ 335,539.75
13. You want to have $69,000 in your savings account 13 years from
now, and you're prepared to make equal annual deposits into the account
at the end of each year. If the account pays 7.30 percent interest, what
amount must you deposit each year? - ANSWER ✓ 3,359.85
14. The Maybe Pay Life Insurance Co. is trying to sell you an
investment policy that will pay you and your heirs $40,000 per year
forever. If the required return on this investment is 6.3 percent, how
much will you pay for the policy? - ANSWER ✓ 634,920.63
