Question

please answer question 7-9, 14-15, and 17-18

7) Which of the following is false? i) the goal of a financial manager is to maximize growth ii) the interests of the financial manager and shareholders are always aligned iii) the goal of a financial manager is to achieve maximum profits as well as market share. iv) the valuation principle states that the market demand determines the value of the costs and benefits of an investment decision. A) All of the above B) i, ii C) i, ii, iv D) i, ii, iii 8) Owen expects to receive $20,000 in one year from a trust fund. If a bank loans money at an interest rate of 5.5%, how much money can he borrow from the bank today on the basis of this information? A) $363.636 B) $21,100 C) $18,605 D) $18,957 9) How much will have in 5 years, if you put $1,000 in your saving account? The bank compounds interest (APR= 3%) monthly. A) $862.61 B) $1,159.27 C) $1,161.62 D) $5,891.60

Answer 1

7) Answer : option (c) 1,2,4

Except Option (3) all other options are false.Profit maximization and increasing the value of share are goals of a financial manager.

8) Answer : Option(D)

& Future vreue (FV) of money - $20,000 1 klumber of years (u), saa 1 year interest rate () and 5.5% F.V - P.V (1491) in Present value (P.V). FV Citain Wilbere) 20,000 2 (1+5.5-1.)" ( 20,000 71) CI+ 0.656) 1.600. - 18,957.345 000 $ 18,957 llo agord , googA , Now

9) Answer: Option (C)

a The amount that you will get at and of the period can be found with the help $ 640 vvЯ Ҳозмika, Mari A > P {+ [alu]) nt Here. Po $1000 9- 36% 90002 , n12 (monthly) t = 5 years (2200135 A o tood(+ (0403) .. todo x (1.0025 ) - 1000 x 1.16162 = $1,169.62

10) Answer : Option(C)

A simple method which can be used in this question is Rule of 72 : This rule of thumb tells you what it takes to double your money, looking at the rate you earn and the length of time you’ll earn that rate. Multiply the number of years by the interest rate. If you get 72, you’ve got a combination of factors that will exactly double your money.

In the given question , figure out how to get to 72. Since 72 divided by 4 is 18, it will take 18 years to double your money.