Problem 1: "Mr.Maghari paid P200,000 as down payment for a car. The remaining amount is to be settled by paying P16, 200 at the end of each month for 5 years. If interest is 10.5% compounded monthly, what is the cash price of his car?" 1. Give the interest rate per conversion period used in the problem. b. 0.0105 c. 0.0875 d. 0.00875 a. 0.105 2. What is the periodic or regular payment? a. P200,000 c. P20,000 d. P30,000 b. P16,200 3. How many payments will Mr.Maghari make in the annuity? b. 12 a. 5 c. 30 d. 60 4. Find the present value of the installment basis a. P744,937.24 5. What is the cash price of the car? a. P944,937.24 b. P744,397.24 c. P743,937.42 d. P743,397.24 b. P944,397.24 c. P943,937.42 d. P943,397.24 Problem 2: "Consider a preferred stock with par value P4,000 per share, 8% dividend rate paid quarterly, and a life of 15 years. If the required annual rate of returns is 10%, what must be the price per share of the stock? 6. What is the payment interval in the problem? a. Every 2 months 7. Compute for the amount of dividend per quarter a. P120 8. What is the present value of the dividend? a. P2,472.69 9. Give the value per share of the stock in 15 years. a. P2,742.69 10. Determine the present value per share of the stock in 15 a. P909.13 b. Every 3 months c. Every 4 months d. Every 6 months b. P100 C. P80 d. P60 b. P2,742.69 c. P7,442.69 d. P7,424.69 b. P4,000.00 c. P400 d. P200 years. b. P990.13 c. P1009.13 d. P1090.13 11. What must be the price per share of the stock? a. P8331.82 b. P8313.82 c. P3381.82 d. P3831.82
Problem 1: "Mr.Maghari paid P200,000 as down payment for a car. The remaining amount is to be settled by paying P16, 200 at the end of each month for 5 years. If interest is 10.5% compounded monthly, what is the cash price of his car?" 1. Give the interest rate per conversion period used in the problem. b. 0.0105 c. 0.0875 d. 0.00875 a. 0.105 2. What is the periodic or regular payment? a. P200,000 c. P20,000 d. P30,000 b. P16,200 3. How many payments will Mr.Maghari make in the annuity? b. 12 a. 5 c. 30 d. 60 4. Find the present value of the installment basis a. P744,937.24 5. What is the cash price of the car? a. P944,937.24 b. P744,397.24 c. P743,937.42 d. P743,397.24 b. P944,397.24 c. P943,937.42 d. P943,397.24 Problem 2: "Consider a preferred stock with par value P4,000 per share, 8% dividend rate paid quarterly, and a life of 15 years. If the required annual rate of returns is 10%, what must be the price per share of the stock? 6. What is the payment interval in the problem? a. Every 2 months 7. Compute for the amount of dividend per quarter a. P120 8. What is the present value of the dividend? a. P2,472.69 9. Give the value per share of the stock in 15 years. a. P2,742.69 10. Determine the present value per share of the stock in 15 a. P909.13 b. Every 3 months c. Every 4 months d. Every 6 months b. P100 C. P80 d. P60 b. P2,742.69 c. P7,442.69 d. P7,424.69 b. P4,000.00 c. P400 d. P200 years. b. P990.13 c. P1009.13 d. P1090.13 11. What must be the price per share of the stock? a. P8331.82 b. P8313.82 c. P3381.82 d. P3831.82
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 1: "Mr.Maghari paid P200,000 as down payment for a car. The remaining amount is to be settled by paying
P16, 200 at the end of each month for 5 years. If interest is 10.5% compounded monthly, what is the cash price of his car?"
1. Give the interest rate per conversion period used in the problem.
b. 0.0105
c. 0.0875
d. 0.00875
a. 0.105
2. What is the periodic or regular payment?
a. P200,000
c. P20,000
d. P30,000
b. P16,200
3. How many payments will Mr.Maghari make in the annuity?
b. 12
a. 5
c. 30
d. 60
4. Find the present value of the installment basis
a. P744,937.24
5. What is the cash price of the car?
a. P944,937.24
b. P744,397.24
c. P743,937.42
d. P743,397.24
b. P944,397.24
c. P943,937.42
d. P943,397.24
Transcribed Image Text:Problem 2: "Consider a preferred stock with par value P4,000 per share, 8% dividend rate paid quarterly, and a life of 15
years. If the required annual rate of returns is 10%, what must be the price per share of the stock?
6. What is the payment interval in the problem?
a. Every 2 months
7. Compute for the amount of dividend per quarter
a. P120
8. What is the present value of the dividend?
a. P2,472.69
9. Give the value per share of the stock in 15 years.
a. P2,742.69
10. Determine the present value per share of the stock in 15
a. P909.13
b. Every 3 months
c. Every 4 months
d. Every 6 months
b. P100
C. P80
d. P60
b. P2,742.69
c. P7,442.69
d. P7,424.69
b. P4,000.00
c. P400
d. P200
years.
b. P990.13
c. P1009.13
d. P1090.13
11. What must be the price per share of the stock?
a. P8331.82
b. P8313.82
c. P3381.82
d. P3831.82
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