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    Qs - Time Value of Money

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    anon_849853749
    This document contains a quiz on time value of money concepts like present value, future value, annuity, discounting, and compounding. It includes 25 multiple choice and calculation questions related to these topics. Sample questions are on calculating future/present value of lump sums and annuities, internal rate of return, net present value, and capital budgeting techniques. The quiz is intended to test understanding of time value of money principles.

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    Qs - Time Value of Money

    Uploaded by

    anon_849853749
    9 views25 pages
    This document contains a quiz on time value of money concepts like present value, future value, annuity, discounting, and compounding. It includes 25 multiple choice and calculation questions related to these topics. Sample questions are on calculating future/present value of lump sums and annuities, internal rate of return, net present value, and capital budgeting techniques. The quiz is intended to test understanding of time value of money principles.

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    Qs.time Value of Money

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    This document contains a quiz on time value of money concepts like present value, future value, annuity, discounting, and compounding. It includes 25 multiple choice and calculation questions related to these topics. Sample questions are on calculating future/present value of lump sums and annuities, internal rate of return, net present value, and capital budgeting techniques. The quiz is intended to test understanding of time value of money principles.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    9 views25 pages

    Qs - Time Value of Money

    Uploaded by

    anon_849853749
    This document contains a quiz on time value of money concepts like present value, future value, annuity, discounting, and compounding. It includes 25 multiple choice and calculation questions related to these topics. Sample questions are on calculating future/present value of lump sums and annuities, internal rate of return, net present value, and capital budgeting techniques. The quiz is intended to test understanding of time value of money principles.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    Download as pptx, pdf, or txt
    of 25

    Quiz Show

    capital budgeting &time value of money.etc


    T.Venkataramanan.FICWA

    Question and Answer


    Samples and Techniques

    1
    Present value is multiplied by the
    compound factor to find the future value .

    TRUE or FALSE?

    2
    Actual percentage rate and annual % yield
    are synonymous.

    TRUE or FALSE?

    3
    In the case of annuity due cash flow occurs
    at the beginning of each time period

    TRUE or FALSE?

    4
    There are two methods by which time
    value of money can be calculated.

    TRUE or FALSE?

    5
    Under the method of discounting we
    reckon the time value of money now.

    TRUE or FALSE?

    6
    Annuity is the term used to describe a
    series of periodic flow of equal qmounts,

    TRUE or FALSE?

    7
    In case of regular annuity cash flow occurs
    at the beginning of each time period

    TRUE or FALSE?

    8
    Under the method of compounding we
    find present value of all cash flows.

    TRUE or FALSE?

    9
    What is net present value?
    • The net present value is equal to the sum of present
    values of all future inflows

    10
    What is an annuity? What are the
    different types?

    An annuity is a series of periodic cash


    flows of equal amounts.when the flow
    occurs at the end of the period it is
    called regular/deferred annuity.when it
    occurs at the beginning of each period
    it is called annuity due.

    11
    Discuss various techniques of capital
    budgeting.

    refer
    cn

    Microsoft Office
    PowerPoint 97-2003 Prese

    12
    What is the future value Of Rs
    1000/=deposited annually for 4 years @10%

    A. Rs 6705

    B. Rs 6105

    C. Rs 4641

    D. 5000

    E. None of the above

    13
    What is the future value Of Rs
    1000/=deposited for 4 years @10%

    A. Rs 6705

    B. Rs 6105

    C. Rs 1464

    D. 5000

    E. None of the above

    14
    What is the present value Of Rs
    1000/=receivable at the end of every year for
    4 years @10%

    A. Rs 6705

    B. Rs 3100 approxly

    C. Rs 4000 approxly

    D. 5000

    E. None of the above

    15
    What is the present value Of Rs
    10000/=receivable at the end of third year
    discounted @10%

    A. Rs 6705

    B. Rs7521 approxly

    C. Rs 4000 approxly

    D. 5000

    E. None of the above

    16
    Match the following:

    Rule of 72 Standard deviation

    NPV compounding

    Future value Doubling period

    annuity DISCOUNTING

    risk Uniform cash flow


    17
    Computing future value involves

    A. Compound interest rate formula

    B. Simple interest formula

    C. Annuity formula

    D. Average of a & b

    E. None of the above

    18
    An annuity involves

    A. Uniform cash flow during different periods

    B. Different cash flows for different periods

    C. Multiple cash flows

    D. Average of a & b

    E. None of the above

    19
    An insurance company offers you,to pay Rs 25,000/=every
    year for 6 years,if you pay Rs 100,000/= today.compute
    the interest rate

    13% approxly
    PVIFA=100,000/25,000= 4
    READ PVIFA TABLE CORRESPONDING TO 6
    YEARS .RATE LIES BETWEEN

    THE VALUE
    12- 14 THE

    20
    Appraisal criteria
    1)Pay back period
    2)Accounting rate of return
    3)NPV
    4)IRR
    5)CBA

    21
    Evaluate : 2 mutually exclusive
    projects
    year Project -1 Rs Project-2 Rs For discount
    rates
    0 (300,000) (300,000) 10%
    1 60,000 130,000 12%
    2 100,000 100,000 14%
    3 120,000 80,000 15%
    4 150,000 60,000 16%

    total 130,000 60,000

    22
    Present value table
    Period/rate 10% 12% !4% 15%
    1 0.909 .893 .877 .870
    2 0.826 .797 .770 .756
    3 0.751 .712 .675 .658
    4 0.683 .636 .592 .572
    5 0.621 .567 .519 .497

    23
    The results
    Discount rate% NPV-1 NPV-2 RECOMMENDAT
    ION
    10 36,622 29,180 A
    12 20,390 17,658 A
    14 5,318 6,288 B
    15 (1826) 1654 B

    24
    IRR
    YEAR CASH FLOW 15% 16%
    0 (100000)
    1 30,000
    2 30,000
    3 40,000
    4 45,000
    100,802 98641

    SINCE NPV IS NEGATIVE AT 16% THE IRR LIES BETWEEN 15 & 16 %


    Approximately the IRR =15+ (802/802+1359)=15+0.37=15.37

    25

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