1001/125.

230
Albany Internal

Surname______________ First Name____________ ID No._____________

MASSEY UNIVERSITY
ALBANY CAMPUS
125.230 BUSINESS FINANCE
MID-TERM TEST
SEMESTER 1 2010
Time Allowed: 80 MINUTES

_______________________________________________________
Instructions
1.
2.
3.
4.
6.
7.
8.

Answer all questions.

The total term test carries 70 marks and counts towards 20% of your final grade.
Compounding/discounting tables have been provided and may be used.
A formula sheet is attached at the end of the examination paper.
Record your name, student ID number on pages 1 and 4 to 8 of this test paper in the
space indicated.
All workings must be clearly shown for Questions 21 to 22.
No one may leave the room during the test.

Version A

1001/125.230
Albany Internal
Section A: Answer questions 1 - 20 on the multiple choice answer sheet provided
on page 4. (Select the one best answer)
(2 Marks each)
Q1.

Teffan borrows $4,500 from the bank at 9% annually compounded interest to

be repaid in three equal annual instalments. The interest paid in the third year
is:
A)
$352.00
B)
$147.00*
C)
$405.00
D)
$277.95
E)
$368.55

Q2.

Which of the following statements about trading on the stock exchange is

true?
A)
the goal of trading is to buy low and sell high for maximum profit
B)
only individuals can legally buy and sell shares; firms are prohibited
C)
once placed, usually orders can be processed in minutes
D)
to make transactions on the floor of the New Zealand Stock Exchange,
a player must have access through a brokerage firm
E)
answers A , C and D are correct *

Q3.

When the amount earned on a deposit has become part of the principal at the
end of a specified time period, the concept is called:
A)
primary interest.
B)
compound interest. *
C)
future value.
D)
discount interest.
E)
nominal interest.

Q4.

Which of the following statements is most correct?

A)
One advantage of forming a corporation is that you have limited
liability.*
B)
Corporations face fewer regulations than sole proprietorships.
C)
One disadvantage of being a sole proprietor is that you have to pay
corporate taxes, even though you dont realize the benefits of being a
corporation.
D)
Statements B and C are correct.
E)
None of the statements above is correct.

Q5.

If the nominal interest rate is 6 per cent per annum, compounded monthly, the
effective interest rate is:
A)
6.09%.
B)
6.14%.
C)
6.17%. *
D)
6.20%.
E)
6.00%

Version A

1001/125.230
Albany Internal
Q6.

The key activities of the financial manager include which of the followings:
A)
making financing decisions.
B)
financial analysis and planning.
C)
managing financial accounting.
D)
making investment decisions.
E)
A, B and D *

Q7.

If a person requires greater return when risk increases, that person is said to
be:
A)
risk-averse. *
B)
risk-aware.
C)
risk-seeking.
D)
risk-indifferent.
E)
risk-neutral.

Q8.

The theory suggesting that for any given issuer, long-term interest rates tend
to be higher than short-term rates is called the:
A)
expectations hypothesis
B)
preferred habitats theory
C)
liquidity preference theory *
D)
market segmentation theory
E)
efficient market hypothesis

Use the information below to answer questions 9-11.

Asset
X
Y
Z
Q9.

Proportion
0.25
0.25
0.50

Annual Return
10%
8%
16%

Beta
1.2
1.6
2.0

Refer to the information above. What is the expected annual return of this
portfolio containing assets X, Y and Z?
A)
8.0%
B)
10.0%
C)
11.0%
D)
12.5% *
E)
16.0%

Q10. Refer to the information above. The beta of the portfolio containing assets X,
Y and Z is:
A)
1.2
B)
1.6
C)
1.7 *
D)
2.0
E)
4.8

Version A

1001/125.230
Albany Internal
Q11. Refer to the information above. The beta of the portfolio indicates this
portfolio:
A)
has an undetermined amount of risk compared to the market.
B)
has less risk than the market.
C)
has more risk than the market. *
D)
has the same risk as the market.
E)
cannot be determined.
Q12. An increase in the beta of a corporation indicates ___________, and , all else
being the same, results in _____________.
A)
a decrease in risk; a higher required rate of return and hence lower
share price.
B)
an increase in risk; a higher required rate of return and hence a lower
share price. *
C)
a decrease in risk; a lower required rate of return and hence a higher
share price.
D)
an increase in risk; a lower required rate of return and hence a higher
share price.
E)
None of the above.
Q13. The relationship between the yield to maturity and the length to maturity is
known as the:
A)
repayment structure of interest rates.
B)
term structure of interest rates. *
C)
risk structure of interest rates.
D)
tax structure of interest rates.
E)
loan amortisation.
Q14. Foxam Company has issued a bond which has a $100 par value and a 10 per
cent annual coupon interest rate. The bond will mature in ten years and
currently sells for $125. Using the approximation formula to calculate the yield
to maturity (YTM) of this bond results in a YTM of:
A)
11.11 per cent.
B)
42.22 per cent.
C)
15.00 per cent.
D)
27.78 per cent.
E)
20.00 per cent.
Q15. If expected return is less than the required return on an asset, rational
investors will:
A)
buy the asset, since price is expected to increase.
B)
sell the asset, which will drive the price down and cause the expected
return to reach the level of the required return. *
C)
buy the asset, which will drive the price up and cause expected return
to reach the level of the required return.
D)
sell the asset, which will drive the price up and cause the expected
return to reach the level of the required return.
E)
none of the above are correct.

Version A

1001/125.230
Albany Internal
Q16. What is the current price of a $1,000 par value bond maturing in 12 years with
a coupon rate of 14 percent, paid semi-annually, that has a YTM of 13
percent?
A)
$828
B)
$839
C)
$1,060*
D)
$1,073
E)
$1,000
Q17. Which of the following statements is most correct?
A)
If an investor sells 100 shares of Microsoft to his brother-in-law, this is
a primary market transaction.
B)
Private securities are generally less liquid than publicly traded
securities.
C)
Money markets are where short-term, liquid securities are traded,
whereas capital markets represent the markets for long-term debt and
common stock.
D)
Statement B and C are correct.*
E)
All of the statements above are correct.
Q18. Asset Y has a beta of 1.2. The risk-free rate of return is 6 percent, while the
return on the market portfolio of assets is 13 percent. The assets market risk
premium is:
A)
7.2 percent
B)
6.0 percent
C)
7.0 percent *
D)
13.0 percent
E)
14.4 percent
Q19. The cost of each type of capital depends on:
A)
the risk-free cost of that type of funds.
B)
the financial risk of the firm.
C)
the business risk of the firm.
D)
all of the above. *
E)
None of the above.
Q20. Long-term debt instruments used by both governments and businesses are
known as:
A)
shares
B)
bills
C)
equities
D)
options
E)
bonds *

Version A

1001/125.230
Albany Internal

Student ID________________ Name___________________________

125.230 Business Finance
MULTIPLE CHOICE ANSWER SHEET

Place an X in the appropriate box.

1.

11.
A

2.

12.
A

3.

13.
A

4.

14.
A

5.

15.
A

6.

16.
A

7.

17.
A

8.

18.
A

9.

19.
A

10.

20.

Version A

1001/125.230
Albany Internal

Student ID________________

Name______________________________

Section B: Please answer the following questions in the spaces provided after
each question.
Q22. A firm has determined its optimal capital structure, which is composed of the
following sources and target market value proportions:
Long-term debt
Preference share capital
Ordinary share equity capital

20%
10%
70%

The firm can sell a 12-year, $1,000 par value, 7 per cent coupon rate bond for
$960. A flotation cost of 2 per cent of the face value would be required in
addition to the discount of $40. The firm has determined it can issue
preference shares at $85 per share. The shares will pay a preferred dividend
per share of $10. The cost of issuing and selling the preference shares is $3
per share. The firm's ordinary shares are currently selling for $18 per share.
The firm expects to pay a dividend at the end of the coming year of $1.74 per
share. Its dividend payments have been growing at a constant rate of 3 per
cent per annum. It is expected that to sell, a new ordinary share issue must be
underpriced $1 per share in flotation costs. The firm's marginal tax rate is 30
per cent.
(When calculate the cost of the bond, you may use the approximate formula)
a. Refer to the information above. Calculate the weighted average cost of capital
up to the point when retained earnings are exhausted.
(10 Marks)
Cost of Debt: Kd=YTM = (70+ (1000-(960-20))/12)/((1000+(960-20)/2)
= 7.73%
(2 Marks)
Cost of preferred shares Kp = 10/(85-3) = 12.20% (2 Marks)
Cost of existing ordinary shares: Ks = D1/Po + g = 1.74/18 + 3% = 12.67%
(2 Marks)
Therefore: WACC = 0.2*7.73%*(1-30%) + 0.1*12.2% + 0.7*12.67% = 11.17%
(4 Marks)
b. Refer to the information above. Calculate the weighted average cost of capital
after all retained earnings are exhausted.
(6 Marks)
Cost of new issued shares Ks = 1.74/(18-1) +3% = 13.24% (3 Marks)
Therefore: WACC = 0.2*7.73%*(1-0.3) + 0.1*13.89% + 0.7*13.24%
= 11.57%
(3 Marks)

Version A

1001/125.230
Albany Internal

Student ID________________

Name______________________________

Q22. A firms ordinary share currently has a beta of 0.9, the risk free rate is 7%
annually, and the market return is 12 percent annually. It is expected that the
firms is going to pay a $3.75 dividend in the coming year and expect to grow
at a constant rate of 4 percent.
a. Calculate the current share price for the firm.
(8 Marks)
Ks = 0.07 + 0.9*(0.12-0.07) = 11.5%
Po= D1/(Ks-g) = 3.75/(0.115-0.04) = $50

(4 Marks)
(4 Marks)

b. The firm has total assets of $1,000,000, total liabilities and preferred
shares are $350,000, and the rest are ordinary shares. If the firm has
10,000 ordinary shares on issue, calculate the book value of each share.
Based on the previous calculation, comment if the firms shares are
overvalued or undervalued?
(6 Marks)
Book value of ordinary equity= 1,000,000 350,000 = $650,000 (2 marks)
Book value per share = $650,000/10,000 = $65 per share (2 Marks)
Therefore, the firms share price is undervalued, as in part a it is $50 per
share.
(2 Mark)

Version A

1001/125.230
Albany Internal

125.230 Business Finance

FORMULA SHEET

FVn = PV (1 + k ) n

FVn = PV (1 +

FVn
(1 + k ) n

PV =

FVn
k
(1 + ) nm
m
k nm

(1 + m ) 1
FVAn = PMT

k /m

1
k nm
(1 + )
m

PVA = PMT

k/m

FV 1 / n
k =(
) 1
PV
PV =

(1 + k ) n 1
FVAn = PMT
= PMT FVIFA( k ,n )
k

1 (1 + k ) n
PVA = PMT
k

= PMT PVIFA( k ,n )

PMT
k

PV =

= 1 +
m

K eff

FVAn (annuitydue) = PMT FVIFA( k ,n ) (1 + k )

FVcontionou = PV e k n

k s = RF + ( k M RF )

PVA(annuitydue) = PMT PVIFA( k ,n ) (1 + k )

k=

i=1

CV =

(k
n

ki

or

k i Pri

k =

i=1

k
k

or

n 1
kp =

(k
n

i 1

Pri

i=1

kj

j =1

p = wi i

p = w 2A 2A + w 2B 2B + 2w A w B rA,B A B

PO =

k nm
)
m

D1
Ks g

kn =

D1
+ g
Nn

YTM =

i =1

I+

(M Nd )
n
M + Nd
2

B 0 = I(PVIFA k,n ) + M(PVIFk,n )

ki = kd(1 - T)
k a = (w i k i ) + (w p k p ) + (w s k s or k n )
9

Version A

125.230 Mid-Term Test

Albany Internal

Present Value of $1 Due at the End of n Periods

Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
40
50

1%
.9901
.9803
.9706
.9610
.9515
.9420
.9327
.9235
.9143
.9053
.8963
.8874
.8787
.8700
.8613
.8528
.8444
.8360
.8277
.8195
.7798
.7419
.6717
.6080

2%
.9804
.9612
.9423
.9238
.9057
.8880
.8706
.8535
.8368
.8203
.8043
.7885
.7730
.7579
.7430
.7284
.7142
.7002
.6864
.6730
.6095
.5521
.4529
.3715

3%
.9709
.9426
.9151
.8885
.8626
.8375
.8131
.7894
.7664
.7441
.7224
.7014
.6810
.6611
.6419
.6232
.6050
.5874
.5703
.5537
.4776
.4120
.3066
.2281

4%
.9615
.9246
.8890
.8548
.8219
.7903
.7599
.7307
.7026
.6756
.6496
.6246
.6006
.5775
.5553
.5339
.5134
.4936
.4746
.4564
.3751
.3083
.2083
.1407

5%
.9524
.9070
.8638
.8227
.7835
.7462
.7107
.6768
.6446
.6139
.5847
.5568
.5303
.5051
.4810
.4581
.4363
.4155
.3957
.3769
.2953
.2314
.1420
.0872

6%
.9434
.8900
.8396
.7921
.7473
.7050
.6651
.6274
.5919
.5584
.5268
.4970
.4688
.4423
.4173
.3936
.3714
.3503
.3305
.3118
.2330
.1741
.0972
.0543

7%
.9346
.8734
.8163
.7629
.7130
.6663
.6227
.5820
.5439
.5083
.4751
.4440
.4150
.3878
.3624
.3387
.3166
.2959
.2765
.2584
.1842
.1314
.0668
.0339

8%
.9259
.8573
.7938
.7350
.6806
.6302
.5835
.5403
.5002
.4632
.4289
.3971
.3677
.3405
.3152
.2919
.2703
.2502
.2317
.2145
.1460
.0994
.0460
.0213

10

9%
.9174
.8417
.7722
.7084
.6499
.5963
.5470
.5019
.4604
.4224
.3875
.3555
.3262
.2992
.2745
.2519
.2311
.2120
.1945
.1784
.1160
.0754
.0318
.0134

10%
.9091
.8264
.7513
.6830
.6209
.5645
.5132
.4665
.4241
.3855
.3505
.3186
.2897
.2633
.2394
.2176
.1978
.1799
.1635
.1486
.0923
.0573
.0221
.0085

11%
.9009
.8116
.7312
.6587
.5935
.5346
.4817
.4339
.3909
.3522
.3173
.2858
.2575
.2320
.2090
.1883
.1696
.1528
.1377
.1240
.0736
.0437
.0154
.0054

12%
.8929
.7972
.7118
.6355
.5674
.5066
.4523
.4039
.3606
.3220
.2875
.2567
.2292
.2046
.1827
.1631
.1456
.1300
.1161
.1037
.0588
.0334
.0107
.0035

13%
.8850
.7831
.6931
.6133
.5428
.4803
.4251
.3762
.3329
.2946
.2607
.2307
.2042
.1807
.1599
.1415
.1252
.1108
.0981
.0868
.0471
.0256
.0075
.0022

14%
.8772
.7695
.6750
.5921
.5194
.4556
.3996
.3506
.3075
.2697
.2366
.2076
.1821
.1597
.1401
.1229
.1078
.0946
.0829
.0728
.0378
.0196
.0053
.0014

15%
.8696
.7561
.6575
.5718
.4972
.4323
.3759
.3269
.2843
.2472
.2149
.1869
.1625
.1413
.1229
.1069
.0929
.0808
.0703
.0611
.0304
.0151
.0037
.0009

16%
.8621
.7432
.6407
.5523
.4761
.4104
.3538
.3050
.2630
.2267
.1954
.1685
.1452
.1252
.1079
.0930
.0802
.0691
.0596
.0514
.0245
.0116
.0026
.0006

17%
.8547
.7305
.6244
.5337
.4561
.3898
.3332
.2848
.2434
.2080
.1778
.1520
.1299
.1110
.0949
.0811
.0693
.0592
.0506
.0433
.0197
.0090
.0019
.0004

Version A

125.230 Mid-Term Test

Albany Internal

Future Value of $1 Due at the End of n Periods

Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
40
50

1%
1.0100
1.0201
1.0303
1.0406
1.0510
1.0615
1.0721
1.0829
1.0937
1.1046
1.1157
1.1268
1.1381
1.1495
1.1610
1.1726
1.1843
1.1961
1.2081
1.2202
1.2824
1.3478
1.4889
1.6446

2%
1.0200
1.0404
1.0612
1.0824
1.1041
1.1262
1.1487
1.1717
1.1951
1.2190
1.2434
1.2682
1.2936
1.3195
1.3459
1.3728
1.4002
1.4282
1.4568
1.4859
1.6406
1.8114
2.2080
2.6916

3%
1.0300
1.0609
1.0927
1.1255
1.1593
1.1941
1.2299
1.2668
1.3048
1.3439
1.3842
1.4258
1.4685
1.5126
1.5580
1.6047
1.6528
1.7024
1.7535
1.8061
2.0938
2.4273
3.2620
4.3839

4%
1.0400
1.0816
1.1249
1.1699
1.2167
1.2653
1.3159
1.3686
1.4233
1.4802
1.5395
1.6010
1.6651
1.7317
1.8009
1.8730
1.9479
2.0258
2.1068
2.1911
2.6658
3.2434
4.8010
7.1067

5%
1.0500
1.1025
1.1576
1.2155
1.2763
1.3401
1.4071
1.4775
1.5513
1.6289
1.7103
1.7959
1.8856
1.9799
2.0789
2.1829
2.2920
2.4066
2.5270
2.6533
3.3864
4.3219
7.0400
11.4674

6%
1.0600
1.1236
1.1910
1.2625
1.3382
1.4185
1.5036
1.5938
1.6895
1.7908
1.8983
2.0122
2.1329
2.2609
2.3966
2.5404
2.6928
2.8543
3.0256
3.2071
4.2919
5.7435
10.2857
18.4202

7%
1.0700
1.1449
1.2250
1.3108
1.4026
1.5007
1.6058
1.7182
1.8385
1.9672
2.1049
2.2522
2.4098
2.5785
2.7590
2.9522
3.1588
3.3799
3.6165
3.8697
5.4274
7.6123
14.9745
29.4570

8%
1.0800
1.1664
1.2597
1.3605
1.4693
1.5869
1.7138
1.8509
1.9990
2.1589
2.3316
2.5182
2.7196
2.9372
3.1722
3.4259
3.7000
3.9960
4.3157
4.6610
6.8485
10.0627
21.7245
46.9016

9%
1.0900
1.1881
1.2950
1.4116
1.5386
1.6771
1.8280
1.9926
2.1719
2.3674
2.5804
2.8127
3.0658
3.3417
3.6425
3.9703
4.3276
4.7171
5.1417
5.6044
8.6231
13.2677
31.4094
74.3575

11

10%
1.1000
1.2100
1.3310
1.4641
1.6105
1.7716
1.9487
2.1436
2.3579
2.5937
2.8531
3.1384
3.4523
3.7975
4.1772
4.5950
5.0545
5.5599
6.1159
6.7275
10.8347
17.4494
45.2593
117.3909

11%
1.1100
1.2321
1.3676
1.5181
1.6851
1.8704
2.0762
2.3045
2.5580
2.8394
3.1518
3.4985
3.8833
4.3104
4.7846
5.3109
5.8951
6.5436
7.2633
8.0623
13.5855
22.8923
65.0009
184.5648

12%
1.1200
1.2544
1.4049
1.5735
1.7623
1.9738
2.2107
2.4760
2.7731
3.1058
3.4785
3.8960
4.3635
4.8871
5.4736
6.1304
6.8660
7.6900
8.6128
9.6463
17.0001
29.9599
93.0510
289.0022

13%
1.1300
1.2769
1.4429
1.6305
1.8424
2.0820
2.3526
2.6584
3.0040
3.3946
3.8359
4.3345
4.8980
5.5348
6.2543
7.0673
7.9861
9.0243
10.1974
11.5231
21.2305
39.1159
132.7816
450.7359

14%
1.1400
1.2996
1.4815
1.6890
1.9254
2.1950
2.5023
2.8526
3.2519
3.7072
4.2262
4.8179
5.4924
6.2613
7.1379
8.1372
9.2765
10.5752
12.0557
13.7435
26.4619
50.9502
188.8835
700.2330

15%
1.1500
1.3225
1.5209
1.7490
2.0114
2.3131
2.6600
3.0590
3.5179
4.0456
4.6524
5.3503
6.1528
7.0757
8.1371
9.3576
10.7613
12.3755
14.2318
16.3665
32.9190
66.2118
267.8635
1083.6574

16%
1.1600
1.3456
1.5609
1.8106
2.1003
2.4364
2.8262
3.2784
3.8030
4.4114
5.1173
5.9360
6.8858
7.9875
9.2655
10.7480
12.4677
14.4625
16.7765
19.4608
40.8742
85.8499
378.7212
1670.7038

17%
1.1700
1.3689
1.6016
1.8739
2.1924
2.5652
3.0012
3.5115
4.1084
4.8068
5.6240
6.5801
7.6987
9.0075
10.5387
12.3303
14.4265
16.8790
19.7484
23.1056
50.6578
111.0647
533.8687
2566.2153

Version A

125.230 Mid-Term Test

Albany Internal

Future Value of an Annuity of $1 per Period for n Periods

Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
40
50

1%
1.0000
2.0100
3.0301
4.0604
5.1010
6.1520
7.2135
8.2857
9.3685
10.4622
11.5668
12.6825
13.8093
14.9474
16.0969
17.2579
18.4304
19.6147
20.8109
22.0190
28.2432
34.7849
48.8864
64.4632

2%
3%
4%
5%
6%
7%
8%
9%
10%
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
1.0000
2.0200
2.0300
2.0400
2.0500
2.0600
2.0700
2.0800
2.0900
2.1000
3.0604
3.0909
3.1216
3.1525
3.1836
3.2149
3.2464
3.2781
3.3100
4.1216
4.1836
4.2465
4.3101
4.3746
4.4399
4.5061
4.5731
4.6410
5.2040
5.3091
5.4163
5.5256
5.6371
5.7507
5.8666
5.9847
6.1051
6.3081
6.4684
6.6330
6.8019
6.9753
7.1533
7.3359
7.5233
7.7156
7.4343
7.6625
7.8983
8.1420
8.3938
8.6540
8.9228
9.2004
9.4872
8.5830
8.8923
9.2142
9.5491
9.8975
10.2598 10.6366 11.0285
11.4359
9.7546 10.1591 10.5828 11.0266 11.4913 11.9780 12.4876 13.0210
13.5795
10.9497 11.4639 12.0061 12.5779 13.1808 13.8164 14.4866 15.1929
15.9374
12.1687 12.8078 13.4864 14.2068 14.9716 15.7836 16.6455 17.5603
18.5312
13.4121 14.1920 15.0258 15.9171 16.8699 17.8885 18.9771 20.1407
21.3843
14.6803 15.6178 16.6268 17.7130 18.8821 20.1406 21.4953 22.9534
24.5227
15.9739 17.0863 18.2919 19.5986 21.0151 22.5505 24.2149 26.0192
27.9750
17.2934 18.5989 20.0236 21.5786 23.2760 25.1290 27.1521 29.3609
31.7725
18.6393 20.1569 21.8245 23.6575 25.6725 27.8881 30.3243 33.0034
35.9497
20.0121 21.7616 23.6975 25.8404 28.2129 30.8402 33.7502 36.9737
40.5447
21.4123 23.4144 25.6454 28.1324 30.9057 33.9990 37.4502 41.3013
45.5992
22.8406 25.1169 27.6712 30.5390 33.7600 37.3790 41.4463 46.0185
51.1591
24.2974 26.8704 29.7781 33.0660 36.7856 40.9955 45.7620 51.1601
57.2750
32.0303 36.4593 41.6459 47.7271 54.8645 63.2490 73.1059 84.7009
98.3471
40.5681 47.5754 56.0849 66.4388 79.0582 94.4608 113.2832 136.3075 164.4940
60.4020 75.4013 95.0255 120.7998 154.7620 199.6351 259.0565 337.8824 442.5926
84.5794 112.7969 152.6671 209.3480 290.3359 406.5289 573.7702 815.0836 1163.9085

12

11%
1.0000
2.1100
3.3421
4.7097
6.2278
7.9129
9.7833
11.8594
14.1640
16.7220
19.5614
22.7132
26.2116
30.0949
34.4054
39.1899
44.5008
50.3959
56.9395
64.2028
114.4133
199.0209
581.8261
1668.7712

12%
1.0000
2.1200
3.3744
4.7793
6.3528
8.1152
10.0890
12.2997
14.7757
17.5487
20.6546
24.1331
28.0291
32.3926
37.2797
42.7533
48.8837
55.7497
63.4397
72.0524
133.3339
241.3327
767.0914
2400.0182

13%
1.0000
2.1300
3.4069
4.8498
6.4803
8.3227
10.4047
12.7573
15.4157
18.4197
21.8143
25.6502
29.9847
34.8827
40.4175
46.6717
53.7391
61.7251
70.7494
80.9468
155.6196
293.1992
1013.7042
3459.5071

14%
1.0000
2.1400
3.4396
4.9211
6.6101
8.5355
10.7305
13.2328
16.0853
19.3373
23.0445
27.2707
32.0887
37.5811
43.8424
50.9804
59.1176
68.3941
78.9692
91.0249
181.8708
356.7868
1342.0251
4994.5213

15%
1.0000
2.1500
3.4725
4.9934
6.7424
8.7537
11.0668
13.7268
16.7858
20.3037
24.3493
29.0017
34.3519
40.5047
47.5804
55.7175
65.0751
75.8364
88.2118
102.4436
212.7930
434.7451
1779.0903
7217.7163

16%
1.0000
2.1600
3.5056
5.0665
6.8771
8.9775
11.4139
14.2401
17.5185
21.3215
25.7329
30.8502
36.7862
43.6720
51.6595
60.9250
71.6730
84.1407
98.6032
115.3797
249.2140
530.3117
2360.7572
10435.6488

17%
1.0000
2.1700
3.5389
5.1405
7.0144
9.2068
11.7720
14.7733
18.2847
22.3931
27.1999
32.8239
39.4040
47.1027
56.1101
66.6488
78.9792
93.4056
110.2846
130.0329
292.1049
647.4391
3134.5218
15089.5017

Version A

125.230 Mid-Term Test

Albany Internal

Present Value of an Annuity of $1 per Period for n Periods

Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
40
50

1%
.9901
1.9704
2.9410
3.9020
4.8534
5.7955
6.7282
7.6517
8.5660
9.4713
10.3676
11.2551
12.1337
13.0037
13.8651
14.7179
15.5623
16.3983
17.2260
18.0456
22.0232
25.8077
32.8347
39.1961

2%
.9804
1.9416
2.8839
3.8077
4.7135
5.6014
6.4720
7.3255
8.1622
8.9826
9.7868
10.5753
11.3484
12.1062
12.8493
13.5777
14.2919
14.9920
15.6785
16.3514
19.5235
22.3965
27.3555
31.4236

3%
.9709
1.9135
2.8286
3.7171
4.5797
5.4172
6.2303
7.0197
7.7861
8.5302
9.2526
9.9540
10.6350
11.2961
11.9379
12.5611
13.1661
13.7535
14.3238
14.8775
17.4131
19.6004
23.1148
25.7298

4%
.9615
1.8861
2.7751
3.6299
4.4518
5.2421
6.0021
6.7327
7.4353
8.1109
8.7605
9.3851
9.9856
10.5631
11.1184
11.6523
12.1657
12.6593
13.1339
13.5903
15.6221
17.2920
19.7928
21.4822

5%
.9524
1.8594
2.7232
3.5460
4.3295
5.0757
5.7864
6.4632
7.1078
7.7217
8.3064
8.8633
9.3936
9.8986
10.3797
10.8378
11.2741
11.6896
12.0853
12.4622
14.0939
15.3725
17.1591
18.2559

6%
.9434
1.8334
2.6730
3.4651
4.2124
4.9173
5.5824
6.2098
6.8017
7.3601
7.8869
8.3838
8.8527
9.2950
9.7122
10.1059
10.4773
10.8276
11.1581
11.4699
12.7834
13.7648
15.0463
15.7619

7%
.9346
1.8080
2.6243
3.3872
4.1002
4.7665
5.3893
5.9713
6.5152
7.0236
7.4987
7.9427
8.3577
8.7455
9.1079
9.4466
9.7632
10.0591
10.3356
10.5940
11.6536
12.4090
13.3317
13.8007

13

8%
.9259
1.7833
2.5771
3.3121
3.9927
4.6229
5.2064
5.7466
6.2469
6.7101
7.1390
7.5361
7.9038
8.2442
8.5595
8.8514
9.1216
9.3719
9.6036
9.8181
10.6748
11.2578
11.9246
12.2335

9%
.9174
1.7591
2.5313
3.2397
3.8897
4.4859
5.0330
5.5348
5.9952
6.4177
6.8052
7.1607
7.4869
7.7862
8.0607
8.3126
8.5436
8.7556
8.9501
9.1285
9.8226
10.2737
10.7574
10.9617

10%
.9091
1.7355
2.4869
3.1699
3.7908
4.3553
4.8684
5.3349
5.7590
6.1446
6.4951
6.8137
7.1034
7.3667
7.6061
7.8237
8.0216
8.2014
8.3649
8.5136
9.0770
9.4269
9.7791
9.9148

11%
.9009
1.7125
2.4437
3.1024
3.6959
4.2305
4.7122
5.1461
5.5370
5.8892
6.2065
6.4924
6.7499
6.9819
7.1909
7.3792
7.5488
7.7016
7.8393
7.9633
8.4217
8.6938
8.9511
9.0417

12%
.8929
1.6901
2.4018
3.0373
3.6048
4.1114
4.5638
4.9676
5.3282
5.6502
5.9377
6.1944
6.4235
6.6282
6.8109
6.9740
7.1196
7.2497
7.3658
7.4694
7.8431
8.0552
8.2438
8.3045

13%
.8850
1.6681
2.3612
2.9745
3.5172
3.9975
4.4226
4.7988
5.1317
5.4262
5.6869
5.9176
6.1218
6.3025
6.4624
6.6039
6.7291
6.8399
6.9380
7.0248
7.3300
7.4957
7.6344
7.6752

14%
.8772
1.6467
2.3216
2.9137
3.4331
3.8887
4.2883
4.6389
4.9464
5.2161
5.4527
5.6603
5.8424
6.0021
6.1422
6.2651
6.3729
6.4674
6.5504
6.6231
6.8729
7.0027
7.1050
7.1327

15%
.8696
1.6257
2.2832
2.8550
3.3522
3.7845
4.1604
4.4873
4.7716
5.0188
5.2337
5.4206
5.5831
5.7245
5.8474
5.9542
6.0472
6.1280
6.1982
6.2593
6.4641
6.5660
6.6418
6.6605

16%
.8621
1.6052
2.2459
2.7982
3.2743
3.6847
4.0386
4.3436
4.6065
4.8332
5.0286
5.1971
5.3423
5.4675
5.5755
5.6685
5.7487
5.8178
5.8775
5.9288
6.0971
6.1772
6.2335
6.2463

Version A

17%
.8547
1.5852
2.2096
2.7432
3.1993
3.5892
3.9224
4.2072
4.4506
4.6586
4.8364
4.9884
5.1183
5.2293
5.3242
5.4053
5.4746
5.5339
5.5845
5.6278
5.7662
5.8294
5.8713
5.8801