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Home Flashcards Abdullah Khasawneh's Study Deck
  Flashcards by Abdullah Khasawneh

Question 1 

A company spends $117 500 today and has positive cash inflows of $34 000 for each of the next 6 years. What is the Internal Rate of Return (IRR)?
A) 14.87%
B) 18.47%
C) 17.48%
D) 16.84%
E) 15.87%
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Question 2 

Li buys a $100 000 life insurance policy, which requires an annual premium of $420 or a monthly premium of $37. In either case, the premium is payable at the beginning of the period of coverage. What is the effective rate of interest Li pays, if he chooses monthly payment plan?
A) 10.89%
B) 13.04%
C) 10.39%
D) 1.09%
E) 5.7%
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Question 3 

Clarington issued 15 year bonds in the amount of $500 000. Interest on the bonds is 2.2% payable annually. What is the issue price of the bonds, if the bonds are sold to yield 2.8% compounded quarterly?
A) $329 004
B) $132 950
C) $461 954
D) $330 425
E) $343 749
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Question 4 

Calculate the legal due date of a $10 000, 120-day note with interest at 4.56% dated March 31, 2012.
A) July 28
B) July 29
C) August 1
D) August 2
E) August 3
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