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Finman Chapter 7

The document contains multiple choice problems related to financial planning and time value of money concepts. It provides calculations for cash receipts, payments, collections, borrowings, present and future values over various time periods using interest rates. The problems cover topics like compound interest, annuities, perpetuities, and time value of money calculations.

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Maria Kathreena Andrea Adeva
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© © All Rights Reserved
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Download as XLSX, PDF, TXT or read online on Scribd
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287 views6 pages

Finman Chapter 7

The document contains multiple choice problems related to financial planning and time value of money concepts. It provides calculations for cash receipts, payments, collections, borrowings, present and future values over various time periods using interest rates. The problems cover topics like compound interest, annuities, perpetuities, and time value of money calculations.

Uploaded by

Maria Kathreena Andrea Adeva
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
Download as xlsx, pdf, or txt
Download as xlsx, pdf, or txt
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Adeva, Maria Kathreena Andrea H.

BSA 2-11

Chapter 7: Financial Planning (continuation)

MC Problems

20 A. 60,500
Collection from:
July 50,000 x 15%
August 70,000 x 50%
September 60,000 x 30%
Cash receipts for September

21 B. 7,100
Purchases:
February 5,000 x 70%
March 12,000 x 30%
Amount to be paid to suppliers in March

22 C. 21,100
Paid to suppliers in March (see no. 21)
Labor cost, 15% of March sales 20,000 x 15%
Other operating costs 15,000 - 4,000
Amount to be disbursed for operations in March

23 D. 14,000
Sales from:
February 10,000 x 60%
March 20,000 x 40%
Amount to be collected from customers in March

24 A. 2,900
Cash balance, March 1
Add: collections in March (see no. 23)
Less: payments in March (see no. 22)
Deficiency
Add: Required borrowing 3,500+14,000-21,000-2,500-500
Cash balance, March 31

Chapter 8: Time Value of Money


MC Problems

3 D. 30,416.25
Face value
Multiply by FV 1.04^5
Total amount at the end of five years

6 C. 385,392
Face value 50,000 × 1/2
Multiply by FVOA, even [(1.13^9) - 1] / 13%
Total amount at the end of nine years

7 D. 435,493
Face value 50,000 × 1/2
Multiply by FVAD [(1.13^9) - 1] / 13% × (1.13)
Total amount at the beginning of the next nine years

8 D. 142,857
Face value
Divide by PV of Perpetuity
Present value

11 B. 7,718
*use PV of 1 at 11%
Y1 1.11^-1 = 0.9009 x 1,000
Y2 1.11^-2 = 0.81162 x 2,000
Y3 1.11^-3 = 0.7312 x 3,500
Y4 1.11^-4 = 0.6587 x 4,000
Present value of the net cash flow

18 C. 11,358.24
Face value
Multiply by FV [1 + (8% / 12)] ^ 7 x 12
Total amount at the end of seven years

20 A. 3,820.32
Total amount at the end of three years:
Face value 20,000
Multiply by FV 1.06^3 1.19102
Less: face value
Compounded interest
21 D. 23.62
Future value
Divide by face value
Total

Less:
Annual rate of return

23 B. 9.22 years
Future value
Multiply by annual rate
Total
Divide by face value
Total
Add:
Total
log 4.16 / log 1.18

30 Face value
Multiply by *constant
Total

Time and interest 5% x 20 yrs


Ending value after 20 years
7,500
35,000
18,000
60,500

3,500
3,600
7,100

7,100
3,000
11,000
21,100

6,000
8,000
14,000

3,500
14,000
-21,100
-3,600
6,500
2,900
25,000
1.21665
30,416.25

25,000
15.41571
385,392.75

25,000
17.41975
435,493.75

10,000
0.07
142,857.14

901
1,623
2,559
2,635
7,718

6,500
1.747421
11,358.24

23,820.32
20,000.00
3,820.32
500
60
8.333333333333
^
0.10
1.23618
1.00
23.62%

10,000,000
18%
1,800,000
500,000
3.6
1
4.6
9.22

15,000
2.7183
40,774.5
^
1
40,774.5

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