Mark must buy four new tires for his car. He is considering buying tires that are $25 a piece more than his regular brand, because the higher priced tires are supposed to increase his miles per gallon by 20%. If the tires are good for 48,000 miles and Mark drives an average of 1,000 miles […]
Date: September 19th, 2020
When sizing up the operations of the firm, it is important to examine all of these EXCEPT: A) the current labor environment. B) the skill level of the firm’s work force. C) the capacity of the firm’s plant or facilities. D) None of the above. ANSWER D
Date: September 19th, 2020
Core Concepts Inc,. has experienced stock returns of 8.4%, 6.3%, and 14.2% over the last three years. Over this time period, what has been the firm’s arithmetic average annual rate of return? A) 9.58% B) 9.63% C) 9.88% D) 9.92% ANSWER B Explanation: B) (8.4 + 6.3 + 14.2)/3 = 9.63%
Date: September 19th, 2020
Rank the order of returns from highest to lowest for the following classes of U.S. securities for the time period 1926 – 2011. A) large stocks, small stocks, 30-year Treasury bonds, and 90-day T-bills B) small stocks, large stocks, 30-year Treasury bonds, and 90-day T-bills C) 30-year Treasury bonds, large stocks, small stocks, 90-day T-bills […]
Date: September 19th, 2020
A firm has fixed operating costs of $25,000, a per unit sales price of $5, and a variable cost per unit of $3. What is its operating breakeven point if it targets net operating income of $10,000? A) 12,500 units B) 15,000 units C) 17,500 units D) 25,000 units ANSWER C
Date: September 19th, 2020
XYZ Corporation borrowed $100,000 for six months from the bank. The rate is prime plus 2 percent. The prime rate was 8.5 percent at the beginning of the loan and changed to 9 percent after two months. This was the only change. How much interest must XYZ corporation pay? A) $2,476 B) $5,417 C) $18,212 […]
Date: September 19th, 2020
Your author identifies the ________ model of capital structure as one that describes the order in which firms typically raise capital. A) step B) internal-external C) queuing D) pecking-order ANSWER D
Date: September 19th, 2020
A firm has a line of credit and borrows $25,000 at 9 percent interest for 180 days or half a year. What is the effective rate of interest on this loan if the interest is paid in advance? A) 4.7 percent B) 9.4 percent C) 9.9 percent D) 10.3 percent ANSWER C
Date: September 19th, 2020
Because banker’s acceptances are typically through foreign banks they are generally considered to be of high risk. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following classes of U.S. securities have NOT averaged an annual rate of return that exceeds the average annual rate of inflation? (Data from 1926 – 2011) A) small company stocks B) large company stocks C) 90-day Treasury bills D) All of these classes of securities have averaged higher average annual rates of […]
Date: September 19th, 2020
