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1. Sheffield Corp. will receive $414000 in 7 years. If the appropriate interest rate is 9%, the present value of the $414000 receipt is A. $641700. B. $756809. C. $227700 D. $226470 2. Vaughn Manufacturing will receive $760000 in a future year. If the future receipt is discounted at an interest rate of 12%, its present value is $343786. In how many years is the $760000 received? A. 6 years B. 7 years C. 5 years D. 8 years 3. Bonita Industries will invest $840000 today. The investment will earn 8% for 3 years, with no funds withdrawn. In 3 years, the amount in the investment fund is A. $1059785. B. $840000 c. $1041600 D. $1058156 4. Lucy and Fred want to begin saving for their baby's college education. They estimate that they will need $132000 in seventeen years. If they are able to earn 3% per annum, how much must be deposited at the end of each of the next seventeen years to fund the education? A. $6553 B. $6066. C. $10026. D. $9598. 5. Use the following 11% interest factors. 7 periods 8 periods 9 periods Present Value of Ordinary Annuity 4.71220 5.14612 5.53705 Future Value of Ordinary Annuity 9.78327 11.85943 14.16397 What amount should be recorded as the cost of a machine purchased December 31, 2017, which is to be financed by making 8 annual payments of $23700 each beginning December 31, 2018? The applicable interest rate is 11%. A. $131227 B. $281069 C. $165900 D. $121963 6. John won a lottery that will pay him $580000 at the end of each of the next twenty years. Zebra Finance has offered to purchase the payment stream for $8630400. What interest rate (to the nearest percent) was used to determine the amount of the payment? A. 4% B. 3% C. 6% D. 5% 7. (Computation of Bond Prices) What would you pay for a $100,000 debenture Bond that matures in $15 years and pays $5000 a year in interest if you want to earn a yield of 6%

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