兹维博迪金融学第二版试题库4TB

PAGE4-PAGE24ChapterFourAllocatingResourcesOverTimeThischaptercontains46multiple-choicequestions,18shortproblemsand9longerproblems.MultipleChoice________istheprocessofgoingfrompresentvaluetofuturevalue,whereas________isfindingthepresentvalueofsomefutureamount.Discounting;compoundingCompounding;annualizingCompounding;discountingDiscounting;leasingAnswer:(c)________referstotheinterestrateatwhichmoneyreceivedbeforetheendoftheplanninghorizoncanbereinvested.InternalrateReinvestmentrateCostofequityCompoundinterestAnswer:(b)Thedifferencebetweenanimmediateannuityandanordinaryannuityis________.thenumberofperiodstheamountofthepaymentstheinterestratethetimingofthepaymentsAnswer:(d)ThepreferredstockofTavistockRealtyoffersacashdividendof$2.28peryearanditissellingatapriceof$110pershare.WhatistheyieldofTavistockRealtypreferredstock?2.07%2.12%2.28%48.25%Answer:(a)Considerthesituationwhereyouhavewona$10millionlotterytobereceivedin25annualequalpaymentsof$400,000.Whatwillhappentothepresentvalueofthesewinningsiftheinterestrateincreasesduringthenext25years?itwillnotchangeitwillbeworthmoreitwillbeworthlessitcannotbedeterminedAnswer:(c)WhatistheeffectiveannualrateonabankaccountthathasAPRof8percentwithinterestcompoundedquarterly?6.12%8.24%8.48%17.17%Answer:(b)YoutakeoutaloanwithanAPRof10%withmonthlycompounding.Whatistheeffectiveannualrateonyourloan?23.87%21.6%19.56%18%Answer:(a)TheCFOofCyberHelpInc.has$250,000incashtodaythathewantstoinvest.Howmuchwillthisinvestmentbeworthinfouryearsifthecurrentinterestrateis8%?$270,000$330,000$340,125$342,150Answer:(c)Ifyoupurchasea$12,000certificateofdeposittodaywithanAPRof14%,withquarterlycompounding,whatwilltheCDbeworthwhenitmaturesin5years?$20,846.99$20,865.60$23,104.97$23,877.47Answer:(d)TheCFOofCyberChainInc.planstounleashamediacampaignthatisexpectedtocost$15millionfouryearsfromtoday.Howmuchcashshouldshesetasidetopayforthisifthecurrentinterestrateis13%?$9.2million$13.3million$14.4million$16.9millionAnswer:(a)TheNPVisameasureofhowmuchyour________wealthchangesasaresultofyourchoiceandiftheNPVis________itdoesnotpaytoundertakethatchoice.future;negativecurrent;negativecurrent;positivefuture;positiveAnswer:(b)The________istheratethatonecanearnsomewhereelseifonedidnotinvestintheprojectunderevaluation.opportunitycostofcapitalcostofdebtcostofequityweightedaveragecostofcapitalAnswer:(a)Youaretryingtodecidewhetherornottobuyabondfor$990thatwillmakeonepaymentfor$1,050fouryearsfromtoday.Whatistheinternalrateofreturnonthebond’scashflows?1.06%1.48%10.6%14.8%Answer:(b)CalculatetheNPVofthefollowingcashflows:youinvest$3,000todayandreceive$300oneyearfromnow,$700twoyearsfromnow,and$1,100startingfouryearsfromnow.Assumethattheinterestrateis7%.–$1,962.62–$1,269.04$1,269.04$1,962.62Answer:(b)Aftereachpaymentofanamortizedloan,theoutstandingbalanceisreducedbytheamountofprincipalrepaid.Therefore,theportionofthepaymentthatgoestowardthepaymentofinterestis________thanthepreviousperiod’sinterestpaymentandtheportiongoingtowardrepaymentofprincipalis________thanthepreviousperiod’s.greater;lowerlower;lowergreater;greaterlower;greaterAnswer:(d)Thepresentvalueofafutureamountcanbecalculatedwiththeequation________.(a)PV=FV(1+i)n(b)PV=FV(1+i)(n)(c)PV=FV/(1+i)n[NOTE:thisshouldbeformattedasastackedfraction](d)PV=FV/(1+i)(n)[NOTE:thisshouldbeformattedasastackedfraction]Answer:(c)Tocomputethefuturevalueofapresentamountusethecompoundamountfactordefinedas________.(a)FV=PV(1+i)n(b)FV=PV(1+i)(n)(c)FV=PV/(1+i)n[NOTE:thisshouldbeformattedasastackedfraction](d)FV=PV/(1+i)(n)[NOTE:thisshouldbeformattedasastackedfraction]Answer:(a)TheearningsofBGBComputershavegrownfrom$3.20to$6.90in6years.Determinetheannualcompoundrate.1.14%13.7%15.6%115.6%Answer:(b)Infiveyearsyouintendtogotograduateschool.Foreachofyourfouryearsingraduateschool,youneedtohaveafundthatwillprovide$25,000peryearatthebeginningofeachyear.Iftheinterestrateis9%throughout,howmuchmustyouputinthefundtoday?$64,996$57,379$50,184$16,249Answer:(b)AspartofyournewjobatCyberInc.thecompanyisprovidingyouwithanewJeep.Yourfirmwillleasethis$34,000Jeepforyou.Thetermsoftheleasearesevenannualpaymentsataninterestrateof10%,whichwillfullyamortizethecostofthecar.Whatistheannualleasepayment?$6,984.39$5,342.86$4,857.14$3,584.00Answer:(a)AruleofthumbwithusingtheinternalrateofreturnistoinvestinaprojectiftheIRRis________theopportunitycostofcapital.greaterthanlessthanlessthanorequaltoone-halfofAnswer:(a)Whenconsideringthetimeframeofaninvestment,arulefollowedbysomeistochoosetheinvestmentwith______paybackperiod.thelongesttheshortestnoaninfiniteAnswer:(b)Amajorproblemwithusingtheinternalrateofreturnruleis________.theremaybemultiplecashoutflowsandmultiplecashinflowstheinternalrateofreturnmaynotexisttheinternalrateofreturnmaynotbeuniquealloftheaboveAnswer:(d)TheNPVisthedifferencebetweenthe________valueofall________cashinflowsminusthe________valueofallcurrentandfuturecashoutflows.future;present;presentpresent;future;presentpresent;present;futurepresent;future;futureAnswer:(b)Whenconsideringeffectiveinterestrates,asthecompoundingfrequencyincreases,theeffectiveannualrategets________and________butapproaches________.larger;larger;alimitsmaller;smaller;alimitlarger;larger;infinitysmaller;smaller;infinityAnswer:(a)In10yearsyouwishtoownyourbusiness.Howmuchwillyouhaveinyourbankaccountattheendof10yearsifyoudeposit$300eachquarter(assumeendoftheperioddeposits)?Assumetheaccountispayinganinterestrateof12%compoundedquarterly.$20,220$21,060$21,626$22,620Answer:(d)ThedirectorofmarketingforCyberProductsInc.planstounleashamediablitzthatisexpectedtocost$4.7millionthreeyearsfromtoday.Howmuchcashshouldshesetasidetodaytopayforthisifthecurrentinterestrateis11%?(a)$6.43million(b)$4.23million(c)$3.62million(d)$3.44millionAnswer:(d)Ifyoupurchaseda$10,000certificateofdeposittodaywithanAPRof12%,withmonthlycompounding,whatwouldbetheCDworthwhenitmaturesin6years?(a)$56,340(b)$20,468(c)$19,738(d)$5,066Answer:(b)ThemanufacturingmanagerofCyberProductsInc.estimatesthatshecansavethecompany$16,000cashperyearoverthenext8yearsbyimplementingarecyclingplan.Whatisthevalueofthesavingstodayiftheappropriateinterestrateforthefirmis9%?Assumecashflowsoccurattheendoftheyear.(a)$64,240(b)$88,557(c)$96,527(d)$128,000Answer:(b)IftheexchangeratebetweentheU.S.dollarandtheFrenchFrancis$0.17perFrenchFranc,thedollarinterestrateis5.5%peryear,andtheFrenchFrancinterestrateis4.5%peryear,whatisthe"break-even"valueofthefuturedollar/FrenchFrancexchangerateoneyearfromnow?$0.172perFF$0.179perFF$5.827perFF$5.882perFFAnswer:(a)Inanytimevalueofmoneycalculation,thecashflowsandtheinterestratemustbedenominated________.inthesamecurrencyindifferentcurrenciesintermsofathirdcurrencyintermsoftheECUAnswer:(a)IftheexchangeratebetweentheU.S.dollarandtheJapaneseyenis$0.00745peryen,thedollarinterestrateis6%peryear,andtheJapaneseinterestrateis7%peryear,whatisthe“break-even”valueofthefuturedollar/yenexchangerateoneyearfromnow?$135.49peryen$134.23peryen$0.00752peryen$0.00738peryenAnswer:(d)ConsiderthesituationwhereyouaretryingtodecideifyoushouldinvestinaSwissprojectoranAmericanproject.Bothprojectsrequireaninitialoutlayof$15,000.TheSwissprojectwillpayyou17,100SwissFrancsperyearfor6years,whereastheAmericanonewillpayyou$11,000peryearfor6years.Thedollarinterestrateis5%peryear,theSwissFrancinterestrateis6%peryear,andthecurrentdollarpriceofaSwissFrancis$0.68perSwissFranc.WhichprojecthasthehigherNPV?theU.S.project;itsNPVis$55,832theU.S.project;itsNPVis$40,833theSwissproject;itsNPVis$42,179theSwissproject;itsNPVis$57,178Answer:(c)The________istheratedenominatedindollarsorinsomeothercurrency,andthe________isdenominatedinunitsofconsumergoods.nominalinterestrate;inflationinterestratenominalinterestrate;realinterestraterealinterestrate;inflationinterestraterealinterestrate;nominalinterestrateAnswer:(b)ConsiderthesituationwhereyouaretryingtodecideifyoushouldinvestinaBritishprojectorU.S.project.Bothprojectsrequireaninitialoutlayof$55,000.TheBritishprojectwillpayyou30,000poundsperyearfor6years,whereastheAmericanonewillgenerate$40,000peryearfor6years.TheBritishinterestrateis5%peryear,andtheAmericaninterestrateis6%peryear;thecurrentdollarpriceofapoundsterlingis$1.6320perpoundsterling.WhichprojecthasthehigherNPV?choosetheU.S.one,ithasaNPVof$196,693choosetheU.S.one,ithasaNPVof$141,693choosetheBritishone,ithasaNPVof$248,506choosetheBritishone,ithasaNPVof$193,506Answer:(d)Whatistherealinterestrateifthenominalinterestrateis9%peryearandtherateofinflationis6%peryear?1.5%2.75%2.83%7.5%Answer:(c)Whatisthenominalinterestrateiftherealrateofinterestis4.5%andtherateofinflationis6%peryear?10.5%10.77%10.86%14.5%Answer:(b)Whatistherealrateofinterestiftheinflationrateis6%peryearandthenominalinterestrateperyearis12.5%?1.32%6.13%5.78%11.79%Answer:(b)Computetherealfuturevalue,tothenearestdollar,of$2,000in35yearstime.Therealinterestrateis3.2%,thenominalinterestrateis8.36%,andtherateofinflationis5%.$6,023$6,853$33,223$11,032Answer:(a)Therealinterestrateis3.2%,thenominalinterestrateis8.36%andtherateofinflationis5%.Weareinterestedindeterminingthefuturevalueof$200in35yearstime.Whatisthefuturepricelevel?2.913.0125.51616.61Answer:(c)Supposeyourchildis9yearsoldandyouareplanningtoopenafundtoprovideforthechild’scollegeeducation.Currently,tuitionforoneyearofcollegeis$22,000.Howmuchmustyouinvestnowinordertopayenoughforthefirstyearofcollegenineyearsfromnow,ifyouthinkyoucanearnarateofinterestthatis4%morethantheinflationrate?$21,154$16,988$15,585$15,457Answer:(d)Supposeyouhaveachildwhois10yearsoldandyouareplanningtoopenafundtoprovideforthechild’scollegeeducation.Currently,tuitionforoneyearis$22,000.Yourchildisplanningtotravelfortwoyearsbeforestartingcollege.Howmuchmustyouinvestnowinordertopayenoughforthefirstyearofcollegetenyearsfromnow,ifyouthinkyoucanearnarateofinterestthatis5%morethantheinflationrate?$10,190$13,506$13,660$20,952Answer:(b)Whenconsideringaplanforlongrunsavings,ifonedoesnothaveanexplicitforecastofinflation,thenonecanmakeplansintermsof:constantrealpaymentsandarealrateofinterestconstantnominalpaymentsandanominalrateofinterestconstantrealpaymentsandanominalrateofinterestconstantnominalpaymentsandarealrateofinterestAnswer:(a)Iftherealrateis4%andtherateofinflationis6%,whatisthenominalrate?8.16%10.16%10.24%10.36%Answer:(c)Youhaveaninvestmentopportunitywithanominalrateof6%compoundeddaily.Ifyouwanttohave$100,000inyourinvestmentaccountin15years,howmuchshouldyoudeposittoday,tothenearestdollar?$43,233$41,727$40,930$40,660Answer:(d)Youhavedeterminedthepresentvalueofanexpectedcashinflowstream.Whichofthefollowingwouldcausethestreamtohaveahigherpresentvalue?Thediscountrateincreases.Thecashflowsarepaidoverashorterperiodoftime.Thediscountratedecreases.Statements(b)and(c)arebothcorrect.Answer:(d)ShortProblemsCyberNowisopeninganofficeintheU.S.CyberNowexpectscashflowstobe$500,000forthefirstyear,$530,000forthesecondyear,$560,000inthethirdyear.IfCyberNowuses12percentasitsdiscountrate,whatisthepresentvalueofthecashflows?Assumecashflowsaremadeattheendoftheyear.Answer:PV=FV/(1+i)n=500,000/(1.12)1+530,000/(1.12)2+560,000/(1.12)3=446,429+422,513+398,597=$1,267,5392.GeorgiaSunInc.haspreferredstockthatpaysanannualdividendof$10.50.Ifthesecurityhasnomaturity(an“infinite”life),whatisitsvaluetoaninvestorwhowishestoobtainan8.5percentrateofreturn?Answer:PVofalevelPerpetuity=$10.50/0.085=$123.53Letussupposeyouhaveachoicebetweeninvestinginabanksavingsaccountthatpays9%compoundedannually(BankYearly)andonethatpays8.5%compoundeddaily(BankDaily).(Assumethisisbasedon365days).Usingonlyeffectiveannualrates,whichbankwouldyouprefer?Answer:Effectiveannualrate:BankYearly=9%Effectiveannualrate:BankDaily=[1+0.085/365]365–1=8.87%YouwouldpreferBankYearlybecauseyouwillearnmoremoney.Steptoe’sbankaccounthasafloatinginterestrateoncertaindeposits.Thatis,everyyeartheinterestrateisadjusted.FouryearsagoSteptoedeposited$35,000intothebankaccount,wheninterestrateswere6%.Thefollowingyeartheratewas6.5%,lastyeartheratewas8%andthisyeartheratefellto7.5%.Howmuchwillbeinhisaccountattheendoftheyear?Assumeannualcompounding.Answer:Amount=$35,000x1.06x1.065x1.08x1.075=$45,872.85Calculatethenetpresentvalueofthefollowingcashflows:youinvest$4,000todayandreceive$400oneyearfromnow,$900twoyearsfromnowand$2000threeyearsfromnow.Assumetheinterestrateis9%.Answer:NPV=$400/(1.09)+$900/(1.09)2+$2,000(1.09)3–$4,000=$366.97+$757.51+$1,544.37–$4,000=$-1,331.15ThemanufacturingmanagerofCyberNowInc.estimatesthatshecansavethecompany$20,000cashperyearoverthenext5yearsbyimplementingarecyclingplan.Whatisthevalueofthesavingstodayiftheappropriateinterestrateforthefirmis8%.Assumethatcashflowsoccurattheendoftheyear.Answer:niPVFVPMTResult58?0$20,000PV=$79,854.20StrollInc.hasbeenoffereda$2,000,000jetundera10yearloanagreement.TheloanrequiresStrollInc.tomakeequal,annual,end-of-yearpaymentsthatincludebothprincipalandinterestontheoutstandingbalance.Theinterestrateontheloanis11%.Calculatetheamountoftheseannualpayments.Answer:niPVFVPMTResult1011–$2,000,0000?PMT=$339,602.85HerbFlintdecidestoput$2,000ayearintoanIRAfundoverhis35yearworkinglifeandthenretire.Assumethedepositsaremadeattheendoftheyear.Iftheaccountearns11%compoundedannually,whatwillHerbhaveintheaccountwhenheretires?Answer:niPVFVPMTResult35110?$2,000FV=$683,179.11Regardingretirementfunds,thereissomedebateastowhetherinvestorsshouldinvestatthebeginningoftheyearratherthanattheendoftheyear.Ifaninvestorinvests$2,000peryearat12%overa35yearperiod,whatisthedifferencebetweenthetwofunds?Answer:EndofYearFund:niPVFVPMTResult35120?$2,000PV=$863,326.99Underanimmediateannuitytheentireamountearnsinterestforanadditionalyear.SotheFVfortheimmediateannuityis$863,326.99X1.12=$996,926.23.Thereforethedifferencebetweenthefundsis:$996,926.23–$863,326.99=$103,599.24Youhavethechancetobuyabondfor$900thatwillmakeonepaymentof$1,100sixyearsfromtoday.Whatistheinternalrateofreturninthebond’scashflows?Answer:900(1+i)6=1,100(1+i)6=1.222i=(1.222)1/6-1i=3.40%ConsiderthesituationwhereyouaretryingtodecideifyoushouldinvestinanAustralianprojectoranAmericanproject.Bothprojectsrequireaninitialoutlayof$20,000.TheAustralianprojectwillpayyouAust$40,000peryearfor6years,whereastheAmericanonewillgenerate$25,000peryearfor6years.TheAustraliandollarinterestrateis6%peryearandtheAmericaninterestrateis5%peryear;thecurrentdollarpriceofanAustraliandollaris$0.65perAustraliandollar.WhichprojecthasthehigherNPV?Answer:AmericanProject:niPVFVPMTPVResult65?0$25,000$126,892AustralianProject:niPVFVPMTPVResult66?0$40,000$196,693(Aust)NPVUSproject=$126,892-$20,000=$106,892TodaytheAustralianprojectisworthA$196,693x$0.65perAust=$127,850.45(inU.S.dollars)NPVAustproject=$127,850.45-$20,000=$107,850.45ChoosetheAustralianprojectsinceithasahigherNPV.IftheexchangeratebetweentheU.S.dollarandtheDutchGuilderis$0.49903perGuilder,thedollarinterestrateis7%peryearandtheDutchinterestrateis8%peryear,whatisthe“break-even”valueofthefuturedollar/Guilderexchangerateoneyearfromnow?Answer:TodayOneYearFromNow$1@7%$1.072.00389Guilders@8%2.16420Guilders“Break-even”point=$1.07/2.16420Guilders=$0.49441perGuilderWhatistherealrateofinterestifthenominalrateis11.5%peryearandtherateofinflationis7%peryear?Answer:Realinterestrate=Nominalinterestrate–rateofinflation1+rateofinflation=0.115–0.071.07=0.04206Realinterestrate=4.21%Ihave$200todayandaminterestedinfindingoutwhatitsequivalentrealfuturevaluewillbein40years.WhatarethetwowaysIhaveavailabletomeincomputingtherealfuturevalue?Answer:Computethefuturevalueusingtherealrateofinterest.Computethenominalfuturevalueusingthenominalrate,andthendeflateittofindtherealfuturevalue.Therealrateofinterestis3.756%,thenominalrateofinterestis10.5%andtherateofinflationis6.5%.Whatistherealfuturevalueof$2,000in40yearstime?Showbothmethods.Answer:MethodOne:Realfuturevalue=$,2000x1.0375640=$8,741MethodTwo:Nominalfuturevalue=$2,000x1.10540=$108,522.83Futurepricelevel=1.06540=12.16RealFV=nominalfuturevaluefuturepricelevel=$108,522.8312.416=$8,741AspartofyournewjobatCyberInc.thecompanyisprovidingyouwithanewJeep.Yourfirmwillleasethis$34,000Jeepforyou.Thetermsoftheleasearesevenannualpaymentsataninterestrateof10%,whichwillfullyamortizethecostofthecar.Assumingthatallpaymentsaremadeontimeandnoadditionalmoneyispaidtowardstheleaseinanyyear,whatpercentofthe5thpaymentwillgotowardsrepaymentofprincipal?Answer:niPVFVPMTResult710–$34,0000?PMT=$6,984.39Themonthlypayment=$6,984.39Ofthemonthlypayment,principal=$5,247%principalrepaymentin5thpayment=$5,247/$6,984.39=75.12%YearBeginningBalanceAnnualPaymentInterestPaidPrincipalPaidRemainingBalance1$34,000$6,984.39$3,400$3,584$30,4162$30,416$6,984.39$3,042$3,942$26,4743$26,474$6,984.39$2,647$4,337$22,1374$22,137$6,984.39$2,214$4,770$17,3675$17,367$6,984.39$1,737$5,247$12,1206$12,120$6,984.39$1,212$5,772$6,3487$6,348$6,984.39$634$6,350––Youhavedecidedtobuyacarthatcosts$35,000.Thedealeroffersyoua5yearloanwithmonthlypaymentsof$814permonth.Whatistheannualinterestrateontheloan?Answer:niPVFVPMTResult60?–$35,0000$814i=1.165Theannualnominalinterestrate=1.165*12=13.98%peryearAsubscriptiontothemagazine“NationalTattler”statesthatyoucanpurchaseaoneyearsubscriptionfor$45today,whichcanberenewedafterayearatthisrate.Alternately,youcanpurchaseatwoyearsubscriptionfor$80today.Ifyouwishtosubscribetothemagazinefortwoyearsandyourrequiredrateofreturnis9%peryear,whichsubscriptionoffershouldyouchoose?Answer:PVofthetwoyearsubscription=$80PVofoneyearsubscriptionandrenewal=$45+45/1.09=$86.28Thetwoyearsubscriptionisthecheaperalternative.LongerProblemsHeathcliffiscurrently25yearsoldandexpectstoretireatage65.SupposethatHeathclifftakesajobimmediatelyandcanearn$35,000fortheremainderofhisworkinglife.Whatisthepresentvalueofhisfutureearnings?Answer:niPVFVPMTResult405?0$35,000PV=$600,568Inordertofinanceyourdreamhome,youareconsideringborrowing$120,000.Theannualpercentagerateis9%andpaymentsaremadeannuallyover5years.Constructtheloan-amortizationschedulefortheannualpaymentsAnswer:niPVFVPMTResult59–$120,0000?PMT=$30,856LoanAmortizationScheduleisasfollows:YearBeginningBalanceAnnualPaymentInterestPaidPrincipalPaidRemainingBalance1$120,000$30,856$10,800$20,056$99,9442$99,944$30,856$8,995$21,861$78,0833$78,083$30,856$7,027$23,829$54,2544$54,254$30,856$4,883$25,973$28,2815$28,281$30,856$2,545$28,311-Totals$154,280$34,250$~120,000Youare60yearsoldandareconsideringwhetheritpaystobuyanannuityfromaninsurancecompany.Foracostof$25,000,theinsurancecompanywillpayyou$3,000peryearfortherestofyourlife.Ifyoucanearn8%peryearonyourmoneyinabankaccountandexpecttoliveuntilage80,isitworthbuyingtheannuity?Whatimpliedinterestrateistheinsurancecompanypayingyou?Answer:Firstcomputethepresentvalueoftheannuity.niPVFVPMTResult208?0$3,000PV=$29,454.44NowcomputetheNPVoftheinvestmentoftheannuity:NPV=$29,454.44-$25,000=$4,454.44Sotheannuitylooksworthbuying.Tocomputetheimpliedinterestrateontheannuity,weneedtofindthediscountratethatmakestheNPVzero.Onafinancialcalculator,wefindtheanswertobe10.32%peryear.4.GemmaPeelis30yearstodayandshewishestoaccumulateenoughmoneyoverthenext35yearstoprovidefora20yearretirementannuityof$100,000atthebeginningofeachyear,startingwithher65thbirthday.Assumetherateofthereturnovertheentireperiodwillbe11%.Whatisthepresentvalueofthisannuity?Answer:niPVFVPMTResult2011?0$100,000PV=$883,9295.TheexchangeratebetweentheCanadiandollarandtheU.S.dollariscurrently$0.69190perCanadiandollar,thedollarinterestrateis6%peryear,andtheCanadiandollarinterestrateis7%peryear.Youhave$100,000inaone-yearaccountthatallowsyoutochoosebetweeneithercurrencyanditpaysthecorrespondinginterestrate.Whatisthe“break-even”valueofthedollar/Canadiandollarexchangerateoneyearfromnow?Answer:U.S.todayOneyearfromnow$1@6%$1.06CanadiantodayOneyearfromnow$1.44530(Cdn)@7%$1.54647“Break-even”point=$1.06/1.54647(Cdndollar)=$0.68543perCanadiandollarAssumethatyouhavejusttakenouta$300,00030yearmortgagewithmonthlypaymentsatanannual8percentrate.Attheendofthe3rdyear(after36payments),youbeginpayinganadditional$100eachmonthtowardsthemortgage.Thatis,formonths37onwardyoumakethescheduledpaymentplusanextra$100eachmonth.Tothenearestwholenumber,howmanyadd