Hrm/531 Week 1
Question 1
2 / 2 pts
When we say why we say "money has time value," we mean:<br>
When we say why we say "money has time value," we mean: It takes time to make money Time is money
Correct!
Money to be received or paid at one time is not of the same value as money to be received or paid at another time A dollar to be paid today is worth less than a dollar to be paid next week Question 2
0 / 2 pts
It is important for managers to be familiar with time value of money concepts because:<br>
It is important for managers to be familiar with time value of money concepts because:
Correct Answer You need them to measure the value of future cash flows It is illegal to manage a firm without them Time value of money concepts affect …show more content…
The lottery rules say that winners are to be paid $10 million in the form of 10 annual payments of $1 million each. Assuming that the interest rate is 10% and the payments are to be made at the end of each of the next 10 years, how much money does your lottery organization have to deposit in an account today in order to make the required payments to a lottery winner? $10,000,000 $3,855,433
Correct!
$6,144,567 $9,090,909 Question 9
2 / 2 pts
Skip to question text.
In November 2007 you bought 100 shares of Microsoft stock for $35.375 a share. In November 2009 you sold your stock for $92.5625 a share. What was your average annual rate of return on your Microsoft investment? (disregard dividends and commissions) 262%
Correct!
62% 585% 1.6% Question 10
2 / 2 pts
Skip to question text.
You may have heard of zero coupon bonds (zero-coupon bonds pay their owners $1,000 at maturity and involve no other cash flows other than the purchase price). If you bought a zero coupon bond for $300, held the bond for 10 years, and then cashed it in for $1,000 at the end of the 10th year, what average annual rate of return would you realize on your
2 / 2 pts
When we say why we say "money has time value," we mean:<br>
When we say why we say "money has time value," we mean: It takes time to make money Time is money
Correct!
Money to be received or paid at one time is not of the same value as money to be received or paid at another time A dollar to be paid today is worth less than a dollar to be paid next week Question 2
0 / 2 pts
It is important for managers to be familiar with time value of money concepts because:<br>
It is important for managers to be familiar with time value of money concepts because:
Correct Answer You need them to measure the value of future cash flows It is illegal to manage a firm without them Time value of money concepts affect …show more content…
The lottery rules say that winners are to be paid $10 million in the form of 10 annual payments of $1 million each. Assuming that the interest rate is 10% and the payments are to be made at the end of each of the next 10 years, how much money does your lottery organization have to deposit in an account today in order to make the required payments to a lottery winner? $10,000,000 $3,855,433
Correct!
$6,144,567 $9,090,909 Question 9
2 / 2 pts
Skip to question text.
In November 2007 you bought 100 shares of Microsoft stock for $35.375 a share. In November 2009 you sold your stock for $92.5625 a share. What was your average annual rate of return on your Microsoft investment? (disregard dividends and commissions) 262%
Correct!
62% 585% 1.6% Question 10
2 / 2 pts
Skip to question text.
You may have heard of zero coupon bonds (zero-coupon bonds pay their owners $1,000 at maturity and involve no other cash flows other than the purchase price). If you bought a zero coupon bond for $300, held the bond for 10 years, and then cashed it in for $1,000 at the end of the 10th year, what average annual rate of return would you realize on your