11. Which of the following is not reflected in IFRS prepared financial statements?
A. Purchasing power changes
B. Foreign exchange rate changes
C. The time value of money
D. The nominal dollar
12. A Canadian company does some business in the U.S. and as a part of these activities they keep US$50,000 on deposit in a U.S. Bank account. The bookkeeper noticed that this year when the account was placed on the balance sheet it was less than last the year's comparative number, even though the amount in the account hadn't changed. What would explain this apparent change?
A. Poor internal controls
B. Changes in purchasing power
C. Exchange rate differences
D. Time value of money
13. What is the concept that people would rather receive a given amount of money sooner rather than later?
A. Time value of money
B. Purchasing power
C. Unit-of-measure assumption
D. Interest rate theory
14. You invest $1,000 in an interest paying account. At the end of the first year you have $1,050, and at the end of the second year you have $1,102.50. This is an example of which of the following concepts?
A. Compound interest
B. Simple interest
C. Present value
D. Changes in purchasing power
15. You invest $1,000 in a Canada Savings Bond. At the end of the first year you have $1,050, and at the end of the second year you have $1,100.00. This is an example of which of the following concepts?
A. Compound interest
B. Simple interest
C. Present value
D. Changes in purchasing power
16. Which of the following is the correct formula for calculating the future value of an amount invested (A) at an interest rate of r, for n periods?
A. (1 + r) x n x A
B. (1 + r)n
x A
C. r x n x A
D. (1 + n)r
x A
17. You have borrowed $20,000 from your parents to pay for your education. You are going to pay them back in 8 years. They are charging you 2% interest on the loan. The total amount that you will have to pay them in 8 years is closest to:
A. $21,600.
B. $23,200.
C. $23,328.
D. $23,433.
18. Sarah invested $15,000 three years ago at 4%. Today the total amount would be closest to:
A. $15,600.
B. $16,800.
C. $16,872.
D. $17,548.
19. Sam lent his son $30,000 to help finance his education. The son must pay back the principal, but no interest, in 6 years. If Sam could have earned 5% in a GIC over the same period, the cost of their gift to their son is closest to:
A. $1,500.
B. $9,000.
C. $10,146.
D. $10,202.
20. A company invested $50,000 for two years at a rate of 8% compounded semi-annually. The amount of interest they earned over the period is closest to:
A. $4,000.
B. $8,000.
C. $8,493.
D. $9,120.