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1. What is the future value of a five-year ordinary annuity with annual payments of $200, evaluated at a 15 percent interest rate?

2. What is the present value of a $100 lump sum to be received in five years if the opportunity cost rate is 10 percent?

3. What is the future value of a $100 lump sum invested for five years in an account paying 10 percent interest?

4. You buy a six-year, 8 percent savings certificate for $1,000. If interest is compounded annually, what will be its value at maturity?

5. You buy a six-year, 8 percent savings certificate for $10,000. If interest is compounded semiannually, what will be its value at maturity? Explain the effect that cause the ending balance to either increase or decrease

6. Discuss the impact on the present value (PV) of a future lump sum as either the discount rate or the number of compounding periods per year increases.

7. An investment opportunity promises a stated interest rate of 6 percent, with semiannual compounding. Compute the effective annual rate, and indicate whether or not the EAR is less or greater

8. You have been selected by the Board of Directors of Triangle Pediatrics as the CEO of this multi-clinics organizations. Upon review of the financials you realized the clinic has $ 300,000.00 in a checking collecting zero interest. You have multiple investment alternatives that pay interest as indicated in a. through e. below.  Which alternative will yield the most money at the end of two year?

a. 10 percent interest, compounded annually

b. 9.9 percent interest, compounded semiannually

c. 9.9 percent interest, compounded monthly

d. 9.5 percent interest, compounded quarterly

e. 9 percent interest, compounded daily

9. You received a pre-approved credit card from Magourty Bank, LLC. The bank quoted APR is 18%. Monthly payments are required. What is the actual interest rate you are paying on such a credit card per month? What is the EAR (effective annual rate)

10. You are the new CEO of Triangle Pediatrics and two weeks after you started in your new position the Chief Financial Officer and Associate PV of Finance left for greener pasture. The parent of one of the clinic’ patient who owed $10,000 and the account is 180 days past due approaches you and requests a 5 year-5 payments plan. She agreed to pay 14% APR. Prepare an amortization plan for her. Indicate the annual payment amount. How much would she pay in total interest?

11. George Washington Hospital new Chief Executive Officer wants to increase efficiency of GWH data processing operations. She decides to acquire a computer system that would reduce the hospital collection by five days among other benefits.  The computer system cost $2,700,000 and spent $241,175 to renovate a building to accommodate the new equipment. The useful life of the computer system is estimated to be eight years and the computer residual value is $100,000.00. Using straight line depreciation method. Calculate GWH yearly depreciation on that equipment. What would be the book value after year 5?

12. Refer to problem 11. GWH sold the computer for $130,000 after 8 years. The hospital corporate tax is 25% What was GWH capital gains? What is its tax liability on that sale?

13. As the CEO of GWH, you hired a new Business Analyst and you ask him to do a feasibility analysis for   two possible projects. Project A is a neighborhood clinic which will provide access to medical care to the neighboring population. Project B- would increase the organization marketability.  Project A would result in a negative NPV while Project B would result in a positive NPV. Your colleagues including the CFO support project B and you reject B for project A. Discuss in details your rational for supporting project A.

14. Assuming 15% non- productive hours. Compute number of Paid-hours for last quarter. Assuming the average wage is $20.00 per hour. How much was paid for the quarter? Ignore fringe benefits (15 points) Fill in the blanks