What is the purpose of the capital market? A) To match people with money to entrepreneurs with great business ideas or concepts B) To more easily regulate the flow of money between parties C) To make money without trying D) To allow people to buy stocks for retirement ANSWER A
Interest paid on student loans may be reduce your federal taxes. Indicate whether the statement is true or false ANSWER TRUE
Military allowances for living, traveling and moving are typically excluded from federal gross income. Indicate whether the statement is true or false ANSWER TRUE
Projects will usually have an initial investment, cash inflows, and a terminal cash flow. Indicate whether the statement is true or false ANSWER TRUE
What are Gerald’s purchases expected to be in February? A) $2,500 B) $5,000 C) $7,500 D) $10,000 E) $15,000 ANSWER C
Leakey Valves Inc is all equity financed and generates perpetual annual EBIT of $600. Assume that the EBIT, and all other cash flows, occur at year end and that we are currently at the beginning of a year. Assume that Leakey Valves has a 100% payout rate, 1,000 shares outstanding, and that shareholders require a […]
When the sale of an asset is equal to its book value, a firm will have to pay taxes on recaptured depreciation. Indicate whether the statement is true or false ANSWER FALSE
Assuming certain conditions are met, a single person may exclude up to $250,000 of the capital gain on the sale of your personal residence. Indicate whether the statement is true or false ANSWER TRUE
Use the data provided on Cadbury to answer the question below. The risk free rate is 4.25%. The expected return on the market portfolio is 9.75%. The corporate tax rate is 40%. The face value of Cadbury’s outstanding bonds is 2.450 billion pounds sterling. The coupon rate on Cadbury’s bonds is 4.5%. Assume that the […]
Members of the Internal Revenue Service are prohibited by law from offering taxpayer assistance. Indicate whether the statement is true or false ANSWER FALSE