What is SWOT an acronym for?
~ A firm’s strength, weakness, opportunities, and threats
Which item is included in a mission statement?
~ Definition of the business
Financial management involves the acquisition and use of financial resources by economics units and
the protection of the units' equity capital from business and financial risk
Given that the total farm assets is 278.48 and the total farm debt is 48.8, what is the value of the equity
Which of the followings are significant tools of financial management?
~ Cash Flows/ Information Flows/ Strategic Management/ Capital Budgeting
Assuming that an annual interest rate is 6%, an investor would be indifferent between $500 today and
$12,000 in 55 years from today.
Response Feedback: Calculation: N=55 %=6 PV=500 PMT= 0 FV=?
What interest rate would a bank have to pay on a $25,000 deposit if you wanted to withdraw $56,305
from your bank account in 12 years? Assuming that interest is compounded yearly.
Response Feedback: Calculation: N=12 %=? PV=25000 PMT= 0 FV=56305
With compounded interest each time interest is paid, it is added to or compounded into the principal
and earns interest over the life of the loan.
What interest rate would a bank have to pay on a $10,000 deposit if you wanted to withdraw $96,463
from your bank account in 20 years? Assuming that interest is compounded yearly.
Response Feedback: Calculation: N=20 %=? PV=10,000 PMT=0 FV= 96,463
Discounting converts a present amount into an equivalent future amount
Net Present Value is compensation for foregone investments or consumption.
Compound Interest means each time interest is paid, it is added to or compounded into the principal but
does not earn interest.
Compounding converts a present amount into an equivalent future amount.
The future value of a single sum can be found with VN=V0(1+r)N. V0 is the present value, VN is the
future value in N periods, r is the rate, and N is the number of periods.
What is the future value of $750 today if it draws interest at 10% compounded annually for 12 years?
Response Feedback: Calculation: N=12 %=10 PV=750 PMT=0 FV=?
Future Value is how much a current sum of money will be worth at a future date assuming a certain
____ rate. ~interest
What is the present value of $1,000 that is to be received 5 years from today and interest rates are 12%
Response Feedback: Calculation: N=10 %=8 PV=1000 PMT=0 FV=?
_______________ is the period of time that principal accrues interest before interest is added to
principal (e.g., daily, monthly, quarterly, and annually).
Net Present Value is compensation for