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Explain what is meant by a flexible budget

State two advantages and two disadvantages of a flexible budget.

Explain what is meant by a flexed budget

Which is worth most, at present values, assuming an annual rate of interest of 8%?

A

$1,200 in exactly one year from now

B

$1,400 in exactly two years from now

C

$1,600 in exactly three years from now

D

$1,800 in exactly four years from now

 project requiring an investment of $1,200 is expected to generate returns of $400 in years 1 and 2  and $350 in years 3 and 4. If the NPV = $22 at 9% and the NPV the project?  =-$4 at 10%, what is the IRR for project?

A

9.15%

B

9.85%

C

10.15%

D

10.85%

A sum of money was invested for 10 years at 7% per annum and is original amount invested (to the nearest $)?now worth $2,000. What was the?

A

$1,026

B

$1,017

C

$3,937

D

$14,048

House prices rise at 2% per calendar month. What is the annual rate of increase correct to one decimal place?

A

24%

B

26.8%

C

12.7%

D

12.2%

What is the present value of ten annual payments of $700, the first paid immediately and discounted at 8%, giving your answer to the nearest $?

A

$4,697

B

$1,050

C

$4,435

D

$5,073

An investor is to receive an annuity of $19,260 for six years commencing at the end of year 1. It has a present value of $86,400.What is the rate of interest (to the nearest whole percent)

A

4%

B

7%

C

9%

D

11%

How much should be invested now (to the nearest $) to receive $24,000 per annum in perpetuity if the annual rate of interest is 5%?

A

$1,200

B

$25,200

C

$120,000

D

$480,000