Corporate Finance Review Exam

Future Value has a _________________ relationship with the interest rate and number of periods

• Positive

• Negative

• Exponential

_________________ causes the present value to decline instead of increase

• Discounting

• Compounding

• Inflation

• Interest

_____________________ brings a future sum of money to the present time using _______________ rate, while _____________ brings a present sum of money to future time

• Discounting; Compound; Compounding

• Compounding; Compound; Discounting

• Discounting; Discount; Compounding

• Discounting; Compounding; Discounting

Annuities are ____________

• Payments

• Loans

• Bonds

• Investments

Two types of Annuities:

• Annuity Placements

• Annuity Due

• Ordinary Annuity

• Unordinary Annuity

The cash payments occur at the END of each time period/ month or year

• Irregular Annuity

• Ordinary Annuity

• Annuity Due

• TVM payments

The cash payments occur at the BEGINNING of each time period/ month or year

• Ordinary Annuity

• Ordinary Due

• Annuity Replacements

• Annuity Due

Putting 2nd BGN -----> 2nd Set into the calculator is how to calculate for ________________

• Bonds

• Ordinary Annuity

• Time Value of Money

• Annuity Due

The Two Major Sources of Capital:

• Risk

• Debt

• Equity

• Investments

Debt Instrument used by companies to raise funds from external investors, generally for large projects or general corporate use

• Loans

• Boans

• Preferred Stock

• Common Stock