A ten-year annuity immediate pays 2000 at the end of the first year, and payments increase by 100 each year. If the annuity yields 6% annual effective interest, determine the Macaulay duration.

1. Derek will deposit $1,692.00 per year into an account starting today and ending in year 5.00. The account that earns 14.00%. How much will be in the account 5.0 years from today?

2. Derek has the opportunity to buy a money machine today. The money machine will pay Derek $10,304.00 exactly 15.00 years from today. Assuming that Derek believes the appropriate discount rate is 14.00%, how much is he willing to pay for this money machine?

You have are in the 5th year of a $300,000 5/1, 30 year ARM with caps of 3/2/5 and an initial (composite) rate of 4.5% (Index of 2.5% + margin of 2%). Your current monthly payments of P+I equal $1,520.06. By the end of Year 5, interest rates have increased substantially and the "index" is now at 6.5%. What will your new monthly payment be for Year 6. [Hint: find the loan principal amount then recast for remaining 25 years at new rate].

What is the value of receiving $5,000 per year starting in one year for 10 years assuming a 3% interest rate?

What if the $5,000 per year cash flows start in 9 years and continue for 12 years?

1. A company's fiscal year may:

Select one:

A. Be any portion of a year including a month or quarter

B. Be for a period either greater or less than 12 months

C. Be the same as the calendar year

D. All of the above are true of a company's fiscal year

2. David Bash's Landscaping Company has compiled the following list of account balances of various assets, liabilities, revenues and expenses on December 31, 2016, the end of its first year of operations.

The retained earnings for David Bash’s Landscaping on December 31, 2016 are:

Select one:

A. $12,600

B. $56,400

C. $36,400

D. $ 2,800

3.

In computing the price-earnings ratio, the current per share market price of the firm's common stock is divided by the:

Select one:

A. Earnings per common share

B. Net income for the year

C. Dividends per common share

D. Par value per common share

4.

The 2016 financial statements for Bloomington Company show the following:

Cash paid for merchandise is:

Select one:

A. $248,000

B. $244,000

C. $240,000

D. $236,000

5.

The full disclosure principle:

Select one:

A. States that personal contact and financial information for each member of senior management for the company be disclosed.

B. Requires that company maintain a record of activities separate from the economic and personal activities of its owners.

C. Requires that a business disclose all significant financial facts and circumstances in a company’s annual report.

D. States that sales revenue should be recorded when services are performed or goods are sold.

E. None of the above

6.

The revenue recognition principle:

Select one:

A. States that the recording of revenue should be based on reliable and verifiable evidence.

B. Only requires that sales revenue must be earned before it is recorded on the income statement.

C. Only requires that sales revenue must be realized or realizable before it is recorded on the income statement.

D. States that sales revenue should be recorded when services are performed or goods are sold.

E. None of the above

Derek will deposit $2,706.00 per year into an account starting today and ending in year 25.00. The account that earns 10.00%. How much will be in the account 25.0 years from today?

1. You own 15 barrels of oil that you can sell this year or next year and is otherwise worthless. The price of abarrelofoilineachyearisp0 =21−1q0 andp0 =17−1q1 withadiscountfactorof.95andacostof

   1 dollars per barrel. Find the optimal extraction plan, the prices in each period and total discounted net revenue.

2. You own 15 barrels of oil that you can sell this year, next year, or the year after next year and is otherwise worthless. The price of a barrel of oil in each year is pi = 14 − 1 qi with a discount factor of .96 and no costs.

   2

   Find the optimal extraction plan, the prices in each period and total discounted net revenue.

3. You own 30 barrels of oil that you can sell this year or next year and is otherwise worthless. The price of a barrel of oil in each year is pi = 6 − qi with a discount factor of .92 and no costs. Find the optimal extraction plan, the prices in each period and total discounted net revenue.

An investment pays $1,900 per year for the first 4 years, $3,800 per year for the next 7 years, and $5,700 per year the following 12 years (all payments are at the end of each year). If the discount rate is 7.70% compounding quarterly, what is the fair price of this investment?

Work with 4 decimal places and round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72.

Assuming monetary benefits of an information system at $150 at Year 1, $200 at Year 2, and $250 at Year 3, one-time costs of $200, recurring costs of $50 per year, a discount rate of 7 percent, and a three-year time horizon, please fill in the cost-analysis benefit table below. Please round each value to 2 decimal places (which indicates that you should keep at least 3 decimal places for intermediate calculations). Each blank between (1) and (23) is worth 0.25 point, while blank (24) is worth 0.75 point.