Federal Housing Administration (FHA) insurance protects A) you against defective title. B) the bank against defective title. C) the lender against loss on the mortgage. D) the borrower against foreclosure on the mortgage. ANSWER C
Date: September 19th, 2020
The Seattle Corporation has been presented with an investment opportunity which will yield end of year cash flows of $30,000 per year in Years 1 through 4, $35,000 per year in Years 5 through 9, and $40,000 in Year 10. This investment will cost the firm $150,000 today, and the firm’s cost of capital is […]
Date: September 19th, 2020
A warranty of merchantability means that the buyer has a right to expect that the good performs as expected. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Anita sold for $60,000 her home that she purchased ten years ago for $20,000. She then purchased another home a month later for $70,000. Her capital gain on the sale of the first home was A) $60,000 B) $40,000. C) $30,000. D) $0. ANSWER B
Date: September 19th, 2020
Private mortgage insurance A) is typically required when the down payment is less than 20 percent. B) is required on all home mortgages. C) is desireable low cost insurance against defective title. D) can not be cancelled during the entire term of the mortgage. ANSWER A
Date: September 19th, 2020
You are considering the purchase of an investment that would pay you $5,000 per year for Years 1-5, $3,000 per year for Years 6-8, and $2,000 per year for Years 9 and 10. If you require a 14% rate of return, and the cash flows occur at the end of each year, then how much […]
Date: September 19th, 2020
If a buyer relies upon a seller to select a product for an intended purpose, there is an implied warranty that the seller’s selection will prove suitable. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Two projects each require a current cash expenditure of $10,000. Project A will generate cash inflows of $2,000 per year for the next twelve years. Project B is expected to return $6,000 in 1 year, $4,000 at the end of year 2, and $3,000 in 3 years. Which project should be selected if funds are […]
Date: September 19th, 2020
Two organizations that help low-income earners obtain mortgages are the A) VA and the FRB. B) FRB and the FHA. C) DOL and the VA. D) VA and the FHA. ANSWER D
Date: September 19th, 2020
Michael had a $4,000 loss on the sale of his car. He A) cannot deduct the capital loss on this personal use asset. B) can only deduct up to $3,000 of the loss in the initial year of the sale. C) can deduct the entire $4,000 loss in the year of the sale. D) can […]
Date: September 19th, 2020
