6. To use the present value formula PVO Ch -CCI+T) *Tr)) at time zero, which of
ID: 2616137 • Letter: 6
Question
6. To use the present value formula PVO Ch -CCI+T) *Tr)) at time zero, which of the following is correcet? a b. c. d. There are an infinite number of cash flows in the future There are at least one billion pieces of cash flows The number of cash flows cannot be counted The first piece of cash flows starts in the next period e. None of the above 7. To use the present value formula PVO Cr -C(CI+)**Tr)) at time zero, which of the following is correct? a. The cash flows cannot be different in different time periods b. There are at least one billion pieces of cash flows c. The number of cash flows cannot be counted d. There is no stopping of cash flows in the future e None of the above 8. Your friend next year, which of the following is right about its present value at time zero if r-10%? you an annuity of $1 every year for 10 years. The first payment occurs a. $6.14 b. $6.76 C. d. No enough information e. None of the above $5.59 9. Your friend promises you an annuity of S1 every year for 10 years. The first payment occurs at year 2, which of the following is nght about its present value at year one if r-10567 $6.14 $6.76 $5.59 No enough information None of the above b. d. e. 10. Which of the following is right about the mortgage type payment? a. The total payments at different time periods are different b.The total payment in each period consists of interest payment and principal payment c. The total payment in each period is calculated by dividing the total borrowed money by the number of years of borrowing d.The total payment in each period is the difference between the principal payment and interest payment 17Explanation / Answer
6-d i e c1 ie forst piece of cash flow starts in next period
7 c ie no. of cash flows cannot be counted, as there is no uncertainty on number and amount of upcoming cash flows in future.
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