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    Real Vs. Financial Assets

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    1. Which of the following are real assets, and which are financial?
    a. A share of stock.
    b. A personal IOU.
    c. A trademark.
    d. A factory.
    e. Undeveloped land.
    f. The balance in the firm's checking account.
    g. An experienced and hardworking sales force.
    h. A corporate bond.

    2. At an interest rate of 12%, the six-year discount factor is 0.507. How many dollars is $0.507 worth in six years if invested at 12%? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)

    Amount $

    3. If the PV of $139 is $125, what is the discount factor? (Round your answer to 3 decimal places.)

    Discount factor

    4. An investment costs $1,548 and pays $138 in perpetuity. If the interest rate is 9%, what is the NPV? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

    Net present value $

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    Solution Summary

    Word attachment identifies which options are real and financial assets, along with calculations for finding the value of an investment, a discount factor and net present value in 4 given questions.