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Question 56 Compounding is the process of finding the present value of some future amount. Select...

Question 56

Compounding is the process of finding the present value of some future amount.

Select one:

True

False

Question 57

Sales divided by net income is referred to as the profit margin.

Select one:

True

False

Question 58

This morning, Alicia bought a ten-year 9% coupon bond that pays interest semi-annually. She paid $994 for a $1,000 bond. If the market interest rate on this type of bond declines to 8.5% tonight, how much will Alicia receive for her first interest payment?

Select one:

a. $90.00

b. $45.00

c. $46.29

d. $32.31

e. $69.58

Question 59

A firm earns net income of $125,000 in a given year and the firm's retained earnings increase $100,000 for that same year. The payout ratio is:

Select one:

a. 60%

b. 80%

c. 20%

d. 40%

e. 100%

Question 60

Suppose a project costs $375 and produces cash flows of $100 over each of the following six years. What is the IRR of the project?

Select one:

a. 10.0%

b. 15.3%

c. There is not enough information; a discount rate is required

d. 18.6%

e. 13.0%

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