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    Quiz 1 Question

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    Nguyễn Dat
    This document contains a quiz for an E-BBA program. It has 9 multiple choice questions testing concepts related to finance, accounting, and present and future value calculations. The questions cover topics like the differences between sole proprietorships and partnerships, advantages of corporations, compound vs simple interest, present value calculations, payments on loans, and calculating future values of cash flows.

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    Quiz 1 Question

    Uploaded by

    Nguyễn Dat
    64 views4 pages
    This document contains a quiz for an E-BBA program. It has 9 multiple choice questions testing concepts related to finance, accounting, and present and future value calculations. The questions cover topics like the differences between sole proprietorships and partnerships, advantages of corporations, compound vs simple interest, present value calculations, payments on loans, and calculating future values of cash flows.

    Original Title

    Quiz 1 Question (3) (1) (10)

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    This document contains a quiz for an E-BBA program. It has 9 multiple choice questions testing concepts related to finance, accounting, and present and future value calculations. The questions cover topics like the differences between sole proprietorships and partnerships, advantages of corporations, compound vs simple interest, present value calculations, payments on loans, and calculating future values of cash flows.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    64 views4 pages

    Quiz 1 Question

    Uploaded by

    Nguyễn Dat
    This document contains a quiz for an E-BBA program. It has 9 multiple choice questions testing concepts related to finance, accounting, and present and future value calculations. The questions cover topics like the differences between sole proprietorships and partnerships, advantages of corporations, compound vs simple interest, present value calculations, payments on loans, and calculating future values of cash flows.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    NEU Business School Quiz #1

    E-BBA Program

    Name: Nguyễn Thành Đạt - 11190998

    1. From a liability point of view, what is the difference between investing in a sole proprietorship
    and a general partnership? (2pt.)

    From a liability point of view, when investing in a sole proprietorship, u are on ur own, are
    responsible for all profits of the business but is also personally liable for all obligations.

    But in case of general partnership, each partner is jointly and severally liable for all
    obligations of the partnership.

    2. Describe the key advantages associated with the corporate form of organization. (2pt.)
    Key advantages associated with the corporate form of organization
    • Limited liability
    • Unlimited life
    • Separation of ownership and management
    • Transfer of ownership is easy
    • Easier to raise capital

    3. You are considering two separate investments. Both investments pay 10 percent interest.
    Investment A pays simple interest and Investment B pays compound interest. Which
    investment should you choose, and why, if you plan on investing for a period of 5 years? (2pt.)

    1
    NEU Business School Quiz #1
    E-BBA Program

    I will choose the investment B. Because both rate and period of time are the same, with 10% interest
    in 5 years, with plan A, we only get interest on the original principal. but with plan B, we get interest
    compounded over time, because the interest after one period will be accumulated and profitable, and
    so on until the end of 5 years

    4. You are scheduled to receive 50 million VND two years. When you receive it, you will invest
    it for 5 more years, at 8 percent per year. How much money will you have 8 years from
    now? (2pt.)

    After 8 years from now u will receive:


    FV=PV x (1+r )t
    =50 x (1+0.08)5
    =73,4664 million VND

    5. You expect to receive $9,000 at graduation in 2 years. You plan on investing this money at 10
    percent until you have $60,000. How many years will it be until this occurs? (You only need
    to write the equation that will answer this question) (3pt.)

    The equation is:


    FV=PV x (1+r )t
    60,000=9,000 x (1+0.1)t
    And then solve for t
    Total time until this occurs: 2 years + t

    2
    NEU Business School Quiz #1
    E-BBA Program

    6. Nam receives $500 on the first of each month. Bac receives $500 on the last day of each month.
    Both Nam and Bac will receive payments for next two years. At a 12 percent discount rate,
    what is the difference in the present value of these two sets of payments? (2pt.)

    So if both Nam and Bac end at the same time, the present value of Nam would be larger than Bac’s

    7. You estimate that you will owe $42,800 in student loans by the time you graduate. The interest
    rate is 4.25 percent. If you want to have this debt paid in full within six years, how much must
    you pay each month? (2pt.)

    3
    NEU Business School Quiz #1
    E-BBA Program

    8. Your parents have made you two offers. The first offer includes annual gifts of 100 million
    VND, 110 million VND, and 120 million VND at the end of each of the next three years,
    respectively. The other offer is the payment of one lump sum amount today. You are trying to
    decide which offer to accept given the fact that your discount rate is 15 percent. What is the
    minimum amount that you will accept today if you are to select the lump sum offer? (2pt.)

    100 x ( (1-(1+15%)-1)/(15%) ) + 110 x ( (1-(1+15%)^-2)/(15%) ) + 120 x (


    (1-(1+15%)^-3)/(15%) )

    = 615,385

    9. Mai will receive $680, $870, and $1,250 each year starting at the end of year one. What is the
    future value of these cash flows at the end of year five if the interest rate is 10 percent? (3pt.)

    680 x (1+0.1)4 +870 x (1+0.1)^3 + 1250 x (1+0.1)^2= 3666

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