9.The is the rate that one can earn somewhere else if one did not invest in the project under evaluation. (a)opportunity cost of capital (b)cost of debt (c)cost of equity (d)weighted average cost of capital Answer:(a) 10.You are trying to decide whether or not to buy a bond for $990 that will make one payment for $1,050 four years from today.What is the internal rate of return on the bond's cash flows? (a)1.06% (b)1.48% (c)10.6% (d)14.8% Answer:(b) 11.After each payment of an amortized loan,the outstanding balance is reduced by the amount of principal repaid.Therefore,the portion of the payment that goes toward the payment of interest is than the previous period's interest payment and the portion going toward repayment of principal is than the previous period's. (a)greater;lower (b)lower:lower (c)greater;greater (d)lower;greater Answer:(d) 12.The earnings of BGB Computers have grown from $3.20 to $6.90 in 6 years.Determine the annual compound rate (a)1.14% (b)13.7% (c)15.6% (d)115.6% Answer:(b) 13.In five years you intend to go to graduate school.For each of your four years in graduate school,you need to have a fund that will provide $25,000 per year at the beginning of each year.If the interest rate is 9%throughout,how much must you put in the fund today? 4-34-3 9. The ________ is the rate that one can earn somewhere else if one did not invest in the project under evaluation. (a) opportunity cost of capital (b) cost of debt (c) cost of equity (d) weighted average cost of capital Answer: (a) 10. You are trying to decide whether or not to buy a bond for $990 that will make one payment for $1,050 four years from today. What is the internal rate of return on the bond’s cash flows? (a) 1.06% (b) 1.48% (c) 10.6% (d) 14.8% Answer: (b) 11. After each payment of an amortized loan, the outstanding balance is reduced by the amount of principal repaid. Therefore, the portion of the payment that goes toward the payment of interest is ________ than the previous period’s interest payment and the portion going toward repayment of principal is ________ than the previous period’s. (a) greater; lower (b) lower; lower (c) greater; greater (d) lower; greater Answer: (d) 12. The earnings of BGB Computers have grown from $3.20 to $6.90 in 6 years. Determine the annual compound rate. (a) 1.14% (b) 13.7% (c) 15.6% (d) 115.6% Answer: (b) 13. In five years you intend to go to graduate school. For each of your four years in graduate school, you need to have a fund that will provide $25,000 per year at the beginning of each year. If the interest rate is 9% throughout, how much must you put in the fund today?