## ACC206 Chapter 8 Solutions (5 Questions)

ACC206 Chapter 8 Solutions (5 Questions) in \$50 only

1. Basic present value calculationsCalculate the present value of the following cash flows, rounding to the nearest dollar:a. A single cash inflow of \$12,000 in five years, discounted at a 12% rate of return.b. An annual receipt of \$16,000 over the next 12 years, discounted at a 14% rate of return.c. A single receipt of \$15,000 at the end of Year 1 followed by a single receipt of \$10,000 at the end of Year 3. The company has a 10% rate of return.d. An annual receipt of \$8,000 for three years followed by a single receipt of \$10,000 at the end of Year 4. The company has a 16% rate of return.

2. Cash flow calculations and net present value

## FIN 534 Week 5 Homework Chapter 8

FIN 534 Week 5 Homework Chapter 8

1. Which of the following statements is CORRECT?

a. Put options give investors the right to buy a stock at a certain strike price before a specified date.

b. Call options give investors the right to sell a stock at a certain strike price before a specified date.

c. Options typically sell for less than their exercise value.

d. LEAPS are very short-term options that were created relatively recently and now trade in the market.

e. An option holder is not entitled to receive dividends unless he or she exercises their option before the stock goes ex dividend.

2. Which of the following statements is CORRECT?