Black = correct answers be P12,000 the first year and to increase by

P2500 each year during its 4-year life. If

Red = syempre mali saka diko alam sagot
capital is worth 12%, determine the
hehe
equivalent uniform year-end cost?
Green = tama pero mali sa canvas P15, 397.13
9. A company invest $1000 today to be repaid
in 5 years in one lump sum at 12%
1. Consider a project that involves the compounded annually. If the rate of inflation
investment of $100,000 now and $100,000 is 3% compounded annually, approximately
at the end of year 1. Revenues of $150,000 how much profit, in present day dollars, is
will be generated at the end of years 1 and realized over the 5 years?
2. What is most nearly the net present value 5200
of this project if the effective annual interest 10. Annuity that has no end, or a stream of cash
rate is 10%. payments that continues forever.
$69500 Perpetuity
2. A series of equal payments made at equal 11. Cash flows that increase or decrease by a
intervals and has no end. constant amount.
Perpetuity Arithmetic gradient
3. A bank is advertising 9.5% accounts that 12. What must two investments with the same
yield 9.84% annually. How often the interest present worth and unequal lives have?
is compounded? Different equivalent uniform annual cash
Quarterly flows
4. The construction of a volleyball court for the 13. $1000 is deposited into a 9% account today.
employees of a highly successful mid-size At the end of 2 years, another $3000 will be
publishing company in California is deposited. In 5 years, a $4000 purchase will
expected to cost $1200 and have annual be made. Approximately how much will be
maintenance cost of $300. At an effective left in the account 1 year after the
annual interest rate of 5%, what is the purchase?
projects capitalized cost?  $1230
$7200  $1690 (mali daw to)
5. Estimated resale value of an asset at the  $1420
end of its useful life.  $1540 (tama)
A and B (Scrap Value, Salvage Value) 14. A gold mine is projected to produce $20,000
6. Corporation manufactures bookcases that it during its first year of operation, $19,000
sells for $65 each. It cost corporation during its second year, $18,000 the third
$35000/yr to operate its plant. This sum year, and so on. If mine is expected to
includes rent, depreciation charges on produce for a total of 10 years, and the
equipment, and salary payments. If the cost effective annual interest rate is 6%, what is
to produce one bookcase is $50, how many its present worth.
bookcases must be sold each year to avoid $118,000
taking a loss? 15. Which of the following statements is not
2334 bookcases/yr correct?
7. It cost P500,000 at the end of each year to  $1 compounded quarterly at 3%for n
maintain a segment of Kennon Rd. in year has a future value of (1.03)4n
Baguio City. If money is worth 10% how  A nominal rate of 12% per annum
much would it pay to spend immediately to compounded quarterly is the same
reduce the annual cost to P100,000. as 12%/4 = 3%/quarter.
P400,000  Compounding quarterly at a nominal
8. The year-end operating and maintenance rate of 12%/yr is equivalent to
cost of a certain machine are estimated to
 compounding annually at a rate of 23. What must two investments with the same
12.55%(mali daw to) present worth and unequal lives have?
 Effective rate of return in options (a), Different equivalent uniform annual cash
(b), and (c) is the difference between flows
12.55% and 12% 24. Debt securities issued by a government to
16. What is an annuity? finance military operations and other
A series of uniform amounts over a expenditure in times of war.
period of time. War bonds
17. A person invests $450 to be collected in 8 25. At an annual rate of return of 8%, what is
years. Given that the interest rate on the the future worth of $100 at the end of year
investment is 14.5%/yr., compounded 4?
annually, most nearly what sum will be $136
collected 8 years from now? 26. During the first 10 years of the life of a
$1330 certain machine the following were spent for
18. A farmer bought a farm he paid P10,000 its maintenance; During the first 5 years,
cash and agreed to pay P2000 at the end of P3000 was spent each year; during the
each month 6 months for 5 years. He failed second 5 years, P5000 each year was
to pay the first 5 payments. At the end of 3 spent. In addition, P8000 was spent for
tears he is required by the seller the entire overhauling at the end of the fourth year,
debt consisting of his accumulated and and P10,000 was also for overhauling at the
future liabilities, otherwise the farm would end of 9th. If the money is worth 9%
be foreclosed by the seller. What must he compounded annually, what was the
pay if money is worth 12% compounded present worth of the various expenditures?
semi-annually? P34580.36
P20,880.85 27. Which plan is the least expensive way to
19. A cash flow that repeats each period without purchase plant maintenance equipment?
change in amount is called The discount rate is 11%.
Annuity
Plan A: $50000 down, equal
20. If money is worth 8% compounded
payments of $25,115.12 for
quarterly, what is the present value of an
20 years
annuity of P1000 payable quarterly for 50
Plan B: Nothing down, equal
years?
payments of $31393.91 for 20
P49,047.35
years
21. A reduction in the value of an asset with the
Plan C: $100000 down, equal
passage of time, due to wear and tear.
payments of $21975.74 for 20
Depreciation
years
22. The contractor for a road project in Calamba  Plan C (tama)
City has proposed two options: asphalt  Plan B
pavement and thick concrete pavement as  Plan A or B
shown in the table. What is the capitalized  Plan A (mali daw to)
cost of the thick concrete pavement if 28. What is most nearly the present worth of a
money is worth 8% compounded annually? $100 annuity over a 10-year period if the
Asphalt Thick interest rate is 8%?
concrete $670
Cost P100,000 P250,000 29. With 12% interest rate, approximately how
Minor P105,000 P20,000 much money must be invested today in
Repairs order to withdraw $1000 per year at the end
Life span 5 3
of each year for 10 years?
P327,008.38
$5650
30. Assuming I = annual rate of return, n= 34. When using net present worth calculations
number of years, F = future worth, and P = to compare the projects, which of the
present worth, what is the future worth of a following could invalidate the calculation?
present amount P?  Non-conventional cash flows
P(1+i) n  Evaluating over different time
31. Princess Fiona bought a brand-new periods
washing machine costing P12000 if paid in  Mutually exclusive projects
cash. However, she can purchase it on  Differences in magnitude of project
installment basis to be paid within 5 years. If (mali daw to)
money is worth 8% compounded annually, 35. A farmer bought a farm he paid P10,000
what is her yearly amortization if all cash and agreed to pay P2000 at the end of
payment is to be made at the beginning of each month 6 months for 5 years. He failed
each year? to pay the first 5 payments. At the end of 3
2400 (ayon sa canvas) tears he is required by the seller the entire
P2782.85 (kaso mali sa canvas but please debt consisting of his accumulated and
check in page 89 sa violet book, same future liabilities, otherwise the farm would
problem niyan at yan yung sagot don) be foreclosed by the seller. What is the cash
32. The following schedule of funds is available value if money is worth 12% compounded
to form a sinking fund. semi-annually?
 P20,000 (correct ans. Sa canvas)
T = 0 yr $5000
P24,720.17 (kaso mali sa canvas but
T = 1 yr $4000
T = 2 yr $3000 please check in page 68 sa violet book,
T = 3 yr $2000 same problem niyan at yan yung sagot don)
At the end of fourth year, equipment costing 36. The contractor for a road project in Calamba
$25000 will have to be purchased as a City has proposed two options: asphalt
replacement for old equipment. Money is pavement and thick concrete pavement as
valued at 20% by the company. At the time shown in the table. What is the capitalized
of purchase, how much money will be cost of the asphalt pavement if money is
needed? worth 8% compounded annually?
 $820 Asphalt Thick
 $1000 (TAMA) concrete
 $8200 (mali din) Cost P100,000 P250,000
 $2000 (mali daw to) Minor P105,000 P20,000
33. The contractor for a road project in Calamba Repairs
City has proposed two options: asphalt Life span 5 3
P323,724.10
pavement and thick concrete pavement as
shown in the table. What is the capitalized 37. When using net present worth calculations
cost of the thick concrete pavement if to compare the projects, which of the
money is worth 8% compounded annually? following could invalidate the calculation?
 Non-conventional cash flows (mali
Asphalt Thick
concrete rin hehe)
Cost P100,000 P250,000  Evaluating over different time
Minor P105,000 P20,000 periods (tama)
Repairs  Mutually exclusive projects
Life span 5 3  Differences in magnitude of project
NOTE: NAGKAMALI NG TANONG DITO!
(mali daw to)
Dapat which is the better option?
38. What is “work in process” classified as?
Asphalt pavement
An asset
39. What a borrower of a particular loan always P49,981.85 (kaso mali sa canvas but
required to do during repayment? please check in page 77 sa violet book,
b. Repay the loan over an agreed-upon same problem niyan at yan yung sagot don)
amount of time 46. A condition where total sales are equal to
40. Suppose a man receives an initial annual total cost of production.
salary of P60,000, increasing at the rate of Break even
P5000 a year. If money is worth 10%, 47. What is the present worth of two $100
determine his equivalent uniform salary for payments at the end of the third and fourth
a period of 8 years? years if the annual interest rate is 8%?
P75022.39 $153
41. It is an expense that is added to the cost 48. Which of the following situations has a
basis of a fixed asset on a company’s conventional cash flow so that an internal
balance sheet. It is also the most important rate of return can be safely calculated and
application of perpetuity. used?
Capitalized Cost You invest in a safe dividend stock and
42. During the first 10 years of the life of a receive dividends each year.
certain machine the following were spent for 49. A machine is under consideration for
its maintenance; During the first 5 years, purchase. The cost of the machine is
P3000 was spent each year; during the $25,000. Each year it operates, the machine
second 5 years, P5000 each year was will generate a savings of $15,000. Given
spent. In addition, P8000 was spent for an effective annual interest rate of 18%,
overhauling at the end of the fourth year, what is the discounted payback period on
and P10,000 was also for overhauling at the the purchase in the machine?
end of 9th. If the money is worth 9% 2.15 yr
compounded annually, what was the 50. If money is worth 8% compounded
equivalent uniform annual cost for the ten- quarterly, what is the present value of
year period? perpetuity of P1000 payable quarterly?
P5388.36 P50,000 (kaso mali sa canvas but please
43. An investment of x dollars is made at the check in page 77 sa violet book, same
end of each year for 3 years, at an interest problem niyan at yan yung sagot don)
rate of 9% per year. What will the dollar
value of the total investment be, most
nearly, upon the deposit of the third
payment?
 $2.3x
 $3.3x
 $1.3x (mali to)
 $0.77x
44. A steel drum manufacturer incurs a yearly
fixed operating cost of $200,000. Each drum
manufacturer cost $160 to produce and
sells it for $200. What is the manufacturers
break-even sales in drums per year?
5000
45. If money is worth 8% compounded
quarterly, what is the present value of an
annuity of P1000 payable quarterly for 100
years?
P49,021.75 (ayon sa canvas)