Assuming a discount rate of 10%, the present value of $1,000 received two years from now is A) $800.00. B) $826.45. C) $899.90 D) $900.00 ANSWER B
Date: September 19th, 2020
Additional standard deduction amounts are allowed for blindness and 65 years of age or older. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The return that lenders require on their loaned funds to the firm is called the: A) coupon rate. B) current yield. C) cost of debt. D) capital gains yield. E) cost of capital. ANSWER C
Date: September 19th, 2020
The essence of Modigliani and Miller’s irrelevance theory is that A) increasing operating leverage will maximize EPS. B) shareholders prefer to invest in firms with a high degree of financial leverage. C) altering a firm’s capital structure will increase its value. D) utilizing more debt will increase a firm’s value. E) the value of the […]
Date: September 19th, 2020
Harry Starr, a college student, earned $4,000 and claimed one personal exemption. Harry’s father still can claim Harry as a dependent and also take the exemption. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Windy City Kite Company has prepared sales forecasts for the first quarter of Year 3 as shown in the top row of the table. Half of Windy City’s kite sales are cash and the other half are credit. Windy City collects credit sales the month following the credit sale. How much of the total January […]
Date: September 19th, 2020
Windy City Kite Company has prepared sales forecasts for the beginning of Year 3 as shown in the top row of the table. Half of Windy City’s kite sales are cash and the other half are credit. Windy City collects credit sales the month following the credit sale. What are Windy City’s total cash inflows […]
Date: September 19th, 2020
The cost of equity for a firm is: A) determined by directly observing the rate of return required by equity investors. B) based on estimates derived from financial models. C) equivalent to a leveraged firm’s cost of capital. D) equal to the risk-free rate of return plus the market risk premium. E) equal to the […]
Date: September 19th, 2020
The standard deduction is indexed to inflation. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The modified internal rate of return corrects which problem inherent in IRR? A) Adjustments for scale differences B) Difficulty in ranking projects C) Differing risk attributes of projects D) Incorporates the time value of money E) It allows for reinvestment of cash inflows from the project at the firm’s cost of capital. ANSWER […]
Date: September 19th, 2020
