QUESTION

Questions:

1. What is the future value of $1,400, placed in a saving account for four years if the account pays 9.00%, compounded quarterly?

2. If you were to borrow 8,600 over the next five years at 0.13 compounded monthly, what would be your monthly payment?

3. Calculating expected return for a portfolio is valuable because it can be used to forecast the future value of the portfolio and it provides a benchmark for comparison to actual returns? TRUE OR FALSE?

4.You have invested 30 percent of your portfolio in Jacob Inc., 40 percent in Bella Co., and 30 percent in Edward Resources. What is the expected return of your portfolio if Jacob, Bella, and Edward have expected returns of 0.09, 0.17, and 0.09, respectfully?

5. Christopher Electronics bought new machinery for $5,030,000 million. This is expected to result in additional cash flows of $1,220,000 million over the next 7 years. What is the payback period for this project? Their acceptance period is five years.

6 A project has the following cash flows:

0 1 2 3

($500) $140.00 $200 $310.00

What is the project’s NPV if the interest rate is S6%?

7 Use the following information to calculate your company’s expected return.

State

Boom

Normal

Recession

Your Answer:

Probability Return

20% 0.29

60% 0.13

20% -0.16

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MGMT640 exam -March 2017

Dated: 18th Mar'17 04:26 PM

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* quarters 4 years]Present 14002 to 8,600 over five 13 monthly, what your