Question :
131.BlackOilCompanyconsideredbuildingaservicestationinanewlocation.Theownersandtheiraccountantsdecidedthatthiswastheprofitablethingtodo.However,soonaftertheymadethisdecision,boththeinterestrateandthecostofbuildingthest : 1261849
131.BlackOilCompanyconsideredbuildingaservicestationinanewlocation.Theownersandtheiraccountantsdecidedthatthiswastheprofitablethingtodo.However,soonaftertheymadethisdecision,boththeinterestrateandthecostofbuildingthestationchanged.Inwhichcasedothesechangesbothmake it less likely that they willnowbuildthestation?
a.Interestratesriseandthecostofbuildingthestationrises.
b.Interestratesriseandthecostofbuildingthestationfalls.
c.Interestratesfallandthecostofbuildingthestationrises.
d.Interestratesfallandthecostofbuildingthestationfalls.
132.HydroGrowisconsideringbuildinganewgreenhouseinwhichtogrowtomatoes.Theboardmeetsanddecidesthatthisistherightthingtodo.Beforetheycanputtheirplansintoaction,theinterestrateincreases.Thepresentvalueofthereturnsfromthisinvestmentproject
a.isnowlowerthanitwasbefore,andsoHydroGrowislesslikelytobuildthebuilding.
b.isnowlowerthanitwasbefore,andsoHydroGrowismorelikelytobuildthebuilding.
c.isnowhigherthanitwasbefore,andsoHydroGrowislesslikelytobuildthebuilding.
d.isnowhigherthanitwasbefore,andsoHydroGrowismorelikelytobuildthebuilding.
133.HappyTrails,abicyclerentalcompany,isconsideringpurchasingthreeadditionalbicycles.Eachbicyclewouldcostthem$249.66.Attheendofthefirstyeartheincreasetotheirrevenueswouldbe$140perbicycle.Attheendofthesecondyeartheincreasetotheirrevenuesagainwouldbe$140perbicycle.Thereafter,therearenoincreasestotheirrevenues.Atwhichofthefollowinginterestratesisthesumofthepresentvaluesoftheadditionalrevenuesclosesttothepriceofabicycle?
a.5percent
b.6percent
c.7percent
d.8percent
134.HalvorsonConstructionhasaninvestmentprojectthatwouldcost$150,000todayandyieldaone-timepayoffof$167,000inthreeyears.WhatisthehighestinterestrateatwhichHalvorsonwouldfindthisprojectprofitable?
a.7%
b.6%
c.5%
d.Itisnotprofitableatanyoftheseinterestrates.
135.DobsonConstructionhasaninvestmentprojectthatwouldcost$150,000todayandyieldaone-timepayoffof$167,000inthreeyears.Amongthefollowinginterestrates,whichisthehighestoneatwhichDobsonwouldfindthisprojectprofitable?
a.5percent
b.4percent
c.3percent
d.2percent
136.TheK-Ninedogfoodcompanyisconsideringthepurchaseofadditionalcanningequipment.Theyexpectthataddingtheequipmentwillyield$200,000attheendofthefirstyearand$250,000attheendofthesecondyearandthennothingafterthat.AtwhichofthefollowingpricesandinterestrateswouldK-Ninebuytheequipment?
a.$415,000iftheinterestrateis5%
b.$419,000iftheinterestrateis4%
c.K-Ninewouldbuytheequipmentinbothcases.
d.K-Ninewouldnotbuytheequipmentineithercase.
137.SometimesOnTime(SOT)Airlinesisconsideringbuyinganewjet.SOTwouldbemorelikelytobuyanewjetiftherewereeither
a.adecreaseinthepriceofanewjetoradecreaseintheinterestrate.
b.adecreaseinthepriceofanewjetoranincreaseintheinterestrate.
c.anincreaseinthepriceofanewjetoradecreaseintheinterestrate.
d.anincreaseinthepriceofanewjetoranincreaseintheinterestrate.
138.Afirmhasthreedifferentinvestmentoptions,eachcosting$10million.OptionAwillgenerate$12millioninrevenueattheendofoneyear.OptionBwillgenerate$15millioninrevenueattheendoftwoyears.OptionCwillgenerate$18millioninrevenueattheendofthreeyears.Whichoptionshouldthefirmchoose?
a.OptionA
b.OptionB
c.OptionC
d.Theanswerdependsontherateofinterest,whichisnotspecifiedhere.
139.Afirmhasthreedifferentinvestmentoptions.OptionAwillgivethefirm$10millionattheendofoneyear,$10million at theend of twoyears, and $10million atthe end ofthree years. OptionB will givethe firm$15 million attheendofoneyear,$10millionattheendoftwoyears,and$5millionattheendofthreeyears.OptionCwillgivethefirm$30millionattheendofoneyear,andnothingthereafter.Whichoftheseoptionshasthehighestpresentvalue?
a.OptionA
b.OptionB
c.OptionC
d.Theanswerdependsontherateofinterest,whichisnotspecifiedhere.
140.Afirmhasfourdifferentinvestmentoptions.OptionAwillgivethefirm$10millionattheendofoneyear,$10million at the endof two years, and$10 million atthe end of threeyears. Option B willgive the firm $5million attheendofoneyear,$10millionattheendoftwoyears,and$15millionattheendofthreeyears.OptionCwillgive thefirm$15millionat theendofoneyear, $10millionattheendof twoyears,and$5million attheendofthreeyears.OptionDwillgivethefirm$21millionattheendofoneyear,nothingattheendoftwoyears,and$9millionattheendofthreeyears.Whichoftheseoptionshasthehighestpresentvalueiftherateofinterestis5percent?
a.OptionA
b.OptionB
c.OptionC
d.OptionD
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