Questions from Corporate Finance


Q: Suppose a firm has had the historic sales figures shown as follows

Suppose a firm has had the historic sales figures shown as follows. What would be the forecast for next year’s sales using the average approach?

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Q: What is the present value of a $1,500 payment

What is the present value of a $1,500 payment made in nine years when the discount rate is 8 percent?

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Q: Compute the present value of an $850 payment made in 10

Compute the present value of an $850 payment made in 10 years when the discount rate is 12 percent.

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Q: Explain what the efficient frontier is and why it is important to

Explain what the efficient frontier is and why it is important to investors.

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Q: HiLo, Inc., doesn’t face any taxes and has $150

HiLo, Inc., doesn’t face any taxes and has $150 million in assets, currently financed entirely with equity. Equity is worth $7 per share, and book value of equity is equal to market...

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Q: Compute the present value of $1,000 paid in three

Compute the present value of $1,000 paid in three years using the following discount rates: 6 percent in the first year, 7 percent in the second year, and 8 percent in the third year.

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Q: Compute the present value of $5,000 paid in two

Compute the present value of $5,000 paid in two years using the following discount rates: 8 percent in the first year and 7 percent in the second year.

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Q: Approximately how many years does it take to double a $100

Approximately how many years does it take to double a $100 investment when interest rates are 7 percent per year?

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Q: Approximately how many years does it take to double a $500

Approximately how many years does it take to double a $500 investment when interest rates are 10 percent per year?

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Q: Approximately what interest rate is needed to double an investment over five

Approximately what interest rate is needed to double an investment over five years?

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