Practice Questions for Online Test Time Value of Money Question 1 Eddie places $2,000 in a savings account earning 6% interest compounded annually. How much will he have 9to the nearest $) in the account at the end of 8 years? Select one: A. $960.00 B. $2,960.00 C. $3,174.00 D. $3,188.00 E. $3,333.00 Question 2 What is the present value (to the nearest $) of the following payment stream discounted at 8% annually: $1,000 at the end of year1, $2,000 at the end of year 2, and $3,000
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Before a person borrows money from a bank to make a major purchase, which question is considered most important for the person to answer? | Correct Answer | : | D: Do the benefits of making the purchase outweigh the costs of borrowing the money? | Reason | : | In making a major purchase that requires a person to borrow money, the individual needs to take into consideration the opportunity costs (what is the trade off in making this purchase) involved with borrowing money in addition to the actual
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allocated in time. • Outcomes of financial decisions are spread out over time and not known with certainty in advance • Three key concepts in finance are : Time value of money Asset Valuation (stocks, bonds, derivatives,...) Risk management 1.1: Interest and return • Income almost never matches consumption desires exactly. Either one will need to borrow to purchase more than one can afford or save excess income. • Costs / benefits of financial decisions are spread over time. So one needs
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physicians to be able to do their best work, or like in the Wallis Memorial Hospital incident, will at times disadvantage them due to not running. Criteria Peachtree should evaluate the implementation of its systems with the following criteria; Value for Money Value for money is important when purchasing or implementing anything in a business. It is important to focus on the long-term value that the business will gain from the
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How should the value of life be measured? Should it be the way the government decided for the September 11 victims? Or should we value the life by how the people lived and what they did throughout their life? Many people do not know what the value of life is. September 11 2001 the country had a terrible attack which many lives were taken. The families of theses victims were devastated losing a loved one. In this situation the government decided to give money to the family members of the victims
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Benefits | | Less sleeping time(short term) Having my own money to spend(short term) | | No time to hang out with friends(short term) experience of having a job(long term)Less time to work on online course(short term) learning the value of money( long term) 1. Explain how the concepts of scarcity, choice, and opportunity cost relate to your dilemma.The opportunity cost would be having less time to spend hanging out with
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David is the founder of the now world-famous website and Youtube channel MBAbullshit.com with 1 MILLION+ FREE tutorial video views worldwide on YouTube (as of May 2012) Beat The Bullshit This book aims to explain some the most "seemingly complicated" topics in these fields in a conceptual way, rather than explaining the common "how to calculate" way, which is much, much better explained and more easily understood in my step-by-step easy and quick tutorial videos (basic videos are FREE!) on my
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21 Homework for Chapter 14 List and briefly explain the advantages that money has over barter? How do the three functions of money get around the problems of barter? 1) Money is a medium of exchange, allowing it to be used to buy any of the items available in the market. Barter on the other hand exchanges items for other items, and these items are limited in what they can be traded to get. 2) Money is also a unit of account. Societies use monetary units such as dollars in an effort
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business, like earnings, revenue and profit margins. They are used most extensively by active traders in the market, as they are designed primarily for analyzing short-term price movements. To a long-term investor, most technical indicators are of little value, as they do nothing to shed light on the underlying business. The most effective uses of technicals for a long-term investor are to help identify good entry and exit points for the stock by analyzing the long-term trend. Technical analysts believe
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Chapter 8 Interest Rates 1. What is the interest rate, and how is it determined? • Price that equates the demand for and the supply of loanable funds; The interest rate is the yearly price charged by a lender to a borrower in order for the borrower to obtain a loan. This is usually expressed as a percentage of the total amount loaned. • Figure 8-1 shows how interest is determined; supply versus demand 2. Describe how interest rates may adjust to an unanticipated increase
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