Annuity A has a greater present value than annuity B when cash flows are discounted using the same positive interest rate for each annuity. Which annuity will have the larger future value if compounded at the same interest rate? A) Annuity A will have a larger future value. B) Annuity B will have a larger […]
Date: September 19th, 2020
Assume the information in Figure 13-1 is correct, EXCEPT the market value of property is now estimated to be $450,000. Use the Book value Plus Adjustment method along with the information from 13-1 and the new estimated value of property to value the firm’s equity. A) $1,100,000 B) $1,200,000 C) $1,300,000 D) $1,400,000 […]
Date: September 19th, 2020
Because it pays higher interest, a CD is considered more liquid than a passbook savings account. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following statements concerning Social Security survivor benefits is false? A) Only widows with a young child are entitled to benefits. B) Survivor benefits are based on the historic earnings of the deceased. C) A dependent parent age 62 or above may receive benefits. D) To be eligible for survivors’ benefits the deceased […]
Date: September 19th, 2020
Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the best interests of the owners, rather than in their self-interests. What strategies are available to shareholders to help ensure that managers are motivated to make decisions in the interest of shareholders? ANSWER Generally speaking shareholders […]
Date: September 19th, 2020
Blanton Corporation increased its financial leverage during 2010 by taking out a loan and using the proceeds to buy back common stock. At the end of 2010, the corporation reported higher earnings per share and higher return on equity. However, its stock price declined. Discuss why this may happen. ANSWER Financial leverage is […]
Date: September 19th, 2020
Which of the following equations for the Book value Plus Adjustment method is correct? A) Value of equity (VE) = market value of equity – adjustments B) Value of equity (VE) = book value of equity + adjustments C) Value of equity (VE) = book value of equity – adjustments D) Value of equity (VE) […]
Date: September 19th, 2020
As the required rate of return of an investment decreases, the market price of the investment decreases. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Bill’s Bike Shop has a return on assets of 12%. Anton’s assets = $100 while Anton’s owner’s equity = $40 and its debt equals $60. What is Bill’s return on equity? A) 20% B) 30% C) 12% D) 18% ANSWER B
Date: September 19th, 2020
Federal deposit insurance insures each deposit you have with a bank up to $100,000. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
