Adjusted gross income equals gross income plus employer paid fringe benefits. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The return on the market is 11%. A firm’s beta is 1.4, and the risk-free rate is 6%. The stock is currently selling for $18 and the next dividend is expected to be $1.75. The firm’s growth rate is 5%. The pre-tax cost of debt is 10% and the equity risk premium is 5%. Estimate […]
Date: September 19th, 2020
Borrowers who believe interest rates are likely to decline prefer fixed rate mortgages. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which one of the following provides a specialized sales or service strategy, offers support at various levels, and occasionally invests in the firm in exchange for periodic fees? A) joint venture B) franchising C) licensing D) royalty ANSWER Answer: B
Date: September 19th, 2020
This organization was established in 1995 to replace the GATT Treaty. A) ASEAN B) EEC C) NAFTA D) WTO ANSWER Answer: D
Date: September 19th, 2020
Marcia received a gift from her mother. She must include it as part of her gross income, and her mother may deduct it as an itemized contribution. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The future value of $5,000 invested today at 3% interest compounded annually for 5 years is A) $5,255. B) $5,520. C) $5,628. D) $5,796. ANSWER D
Date: September 19th, 2020
For mutually exclusive projects the underlying cause of conflicts in ranking for projects by internal rate of return and net present value methods is: A) the reinvestment rate assumption regarding cash flows. B) that neither method explicitly considers the time value of money. C) the assumption made by the IRR method that intermediate cash flows […]
Date: September 19th, 2020
As firms become more leveraged, the risk of insolvency rises because A) the use of debt results in interest payments that cannot be avoided during poor economic conditions. B) bondholders trade lower risk for greater expected returns. C) interest payments on most bonds vary with the level of market rates. D) bondholders are less vigilant […]
Date: September 19th, 2020
Borrowers who anticipate a significant increase in the rate of inflation prefer adjustable-rate mortgages. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
