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Investing in property, plant, and equipment acquisition

1. If you invest $750 every six months at 8% compounded semi-annually, how much would you accumulate at the end of 10 years?
a. $10,065
b. $10,193
c. $22,334
d. $21,731

2. The focus of current asset management is on:
a. property, plant, and equipment acquisition.
b. cash, accounts receivable, and inventory levels.
c. investments in marketable securities.
d. both a and c.
e. all of the above.

3. With regard to the hedging principle, which of the following assets should be financed with current liabilities?
a. Minimum level of cash required for year-round operations
b. Expansion of accounts receivable to meet seasonal demands
c. Machinery used to produce a firm's inventory
d. Both a and b
e. Both b and c

4. If you place $50 in a savings account with an interest rate of 7% compounded weekly, what will the investment be worth at the end of five years (round to the nearest dollar)?
a. $72
b. $70
c. $71
d. $57

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If you invest $750 every six months at 8% compounded semi-annually, how much would you accumulate at the end of 10 years?
c. $22,334
In six month period there are two compounding periods of 3 moths each, thus Interest rate for 6 months = (1+8%/4)^2-1=4.04%
The cash flow are an annuity and we need to calculate the future value of ...

Solution Summary

The solution examines investing in property, plant and equipment acquisition for asset management.

$2.19