San Francisco State University - FIN 357

Chapter 8

1)You have decided to invest $4,000 at a rate of 10% compounded quarterly during 30 years. After that, you will be more careful with you money and expect to earn 5% compounded semiannually. Which is the correct formula for cell B8 that will allow you to determine how much money will you have after 45 years from now, assuming this is the only dollar amount you will invest during that time?

a. =FV(B4/B6,30B6,0,-B2,0)

b. =FV(B5/B7,(B3-30)B7,0,-B2,0)

c. =FV(B4/B6,(B3-30)B7,0,-FV(B5/B7,30B6,0,-B2,0),0)

d. =FV(B5/B7,(B3-30)B7,0,-FV(B4/B6,30B6,0,-B2,1),1)

e. =FV(B5/B7,(B3-30)B7,0,-FV(B4/B6,30B6,0,-B2,0),0)

2. You are planning for an early retirement, so you decide to invest $5,000 per year, starting at age 23. You plan to retire when you can accumulate $1M. If the average rate of return on your investments is %12. What should be the formula on cell B4 that will allow you to determine how old will you be when you retire?

a. =NPER(B3,-B2,0,B1,0)

b. =NPER(B3/12,-B2,0,B1,0)+2312

c. =NPER(B3,-B2,0,-B1,0)-23

d. =NPER(B3,-B2,0,B1,0)+23

e. =NPER(B2,-B3,0,B1,0)

3. What is the value of cell B8?

a. 1.80

b. 2.17

c. 2.32

d. 2.45

e. 2.73

4. Which should be the right formula for cell B8?

a. =NPV(B6,B2:B5)/-B2

b. =NPV(B6,B3:B5)/-B2

c. =(NPV(B6,B3:B5)+B2)/B2+1

d. =NPV(B6,B3:B5)/B2

e. =NPV(B6,B2:B5)/B2

5. 

   In column E, 1 indicates that the project will be selected and 0 otherwise. If you want to find the cost weighted average IRR of just those projects

that will be selected, what should be the right formula on cell B7 using an array formula?

a. =SUM(B2:B5 $E2:$E5)/B6

b. {=SUM(B2:B5D2:D5$E2:$E5)/B6}

c. ={SUM(B2:B5D2:D5$E2:$E5)}/B6

d. =SUM(B2:B5D2:D5$E2:$E5)/B6

e. {=SUM(B2:B5$E2:$E5)/B6}

6. Below is the code for the function PriceDGM:

What is the outcome of cell B?

1. 1. VALUE!

b. -$110.50

c. $110.50

d. $55.64

e. $27.34

7. Which variable is incorrectly defined in the following code?
   1. DuPontROE

1. 2. ProfitMargin
   3. AssetTurnover
   4. DebtRatio
   5. Function

8. Given the following code:

a. $684.25

b. $712.29

c. $814.54

d. $895.35

e. $954.23

9. Given the following code of the function FVCFs:

If you apply this function to the following data:

Where CashFlows = B2:F2, Time = 7, and Rate = 7%, what is the value of FV when t=2? a. $150.07

b. $430.58

c. $823.82

d. $1,313.84

e. $1,886.29

10. Which type of variable uses the most memory?

1. 1. Byte
   2. Integer
   3. Long Integer
   4. Single
   5. Double