Pocket money refers to “pocket lines of credit” offered by major credit cards. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The acceleration clause in a loan agreement allows the lender to A) collect the entire unpaid balance immediately if you miss a payment. B) add on new collateral to an existing installment loan. C) collect all unpaid interest immediately if you miss a payment. D) step up your monthly payments from, say, $100 a month […]
Date: September 19th, 2020
Rural Hydroponics has total equity of $560,000; sales of $2,250,000; current assets of $700,000; and total liabilities of $435,000. What is Rural Hydroponics’ total asset turnover? A) 2.26 B) 3.21 C) 4.02 D) 5.51 ANSWER A
Date: September 19th, 2020
Given the anticipated rate of inflation (i) of 1.7% and the real rate of interest (R) of 1.4%, find the nominal rate of interest (r). What will be an ideal response? ANSWER r = R + i + Ri r = .014 + .017 + (.014 )(.017 ) r = .031 + .000238 […]
Date: September 19th, 2020
The S&P 500 index must be used as the measure of market return in the CAPM or the results are not theoretically accurate. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The best form of business entity to attract new capital is the sole proprietorship because investors only need to deal with one owner. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
You own a contract that promises an annuity cash flow of $100 beginning-of-the-year cash flows for each of the next three years (note: the first cash flow is today). At an interest rate of 10%, what is the future value of this contract exactly three years from today? A) $248.69 B) $273.55 C) $331.00 D) […]
Date: September 19th, 2020
Optimal capital structure, or debt capacity, is the debt-equity mix that minimizes the cost of the firm’s debt. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
One motive for holding cash is to undertake transactions. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
TransSystems Inc. has a total equity of $560,000; sales of $2,250,000; total assets of $995,000; and current liabilities of $310,000. What is TransSystems Inc.’s debt ratio? A) 66.7% B) 43.7% C) 55.4% D) 31.2% ANSWER B
Date: September 19th, 2020
