It is January 1st and Darwin Davis has just established an IRA (Individual Retirement Account). Darwin will put $1000 into the account on December 31st of this year and at the end of each year for the following 39 years (40 years total). How much money will Darwin have in his account at the end […]
Optimal capital structure “first” criteria suggests that FLEXIBILITY should be ________ and that the best way to obtain that is with ________ levels of debt and ________ levels of equity. A) high; high; low B) low; low; high C) high; low; high D) low; high; low ANSWER C
The general liability policy covers bodily injury or property damage caused by “an accident, including continuous repeated exposure to substantially the same general harmful conditions.” This cause is loss is called a(n) A) occurrence. B) accident. C) event. D) incident. ANSWER Answer: A
Based on the information in Table 4-3, the current and acid-test ratios are, respectively, A) 2.37 and 1.27. B) 2.18 and 1.39. C) 2.18 and 1.27. D) 2.37 and 1.39. ANSWER C
Felton Financial Inc, had net earnings last year of $487,000. If the firm has a dividend payout policy of 30%, what was the addition to retained earnings? A) $340,900 B) $487,000 C) $146,100 D) There is not enough information to answer this question. ANSWER A Explanation: A) NE * (1-DPO) = $487,000 * […]
Some directors and officers (D&O) liability policies include an insuring agreement tcovers the legal liability of a corporation arising out of the wrongful acts of directors and officers. This coverage for the corporation is called A) blanket coverage. B) corporate reimbursement coverage. C) personal liability of directors and officers coverage. D) entity coverage. […]
Which of the following forms of business organization limits the liability of owners? A) sole proprietorship B) general partnership C) two person partnership D) corporation ANSWER D
One general liability loss exposure develops as a result of a written or oral agreement to assume the legal liability of another party. A lease that specifies that the building owner is held harmless for liability arising out of use of the building is an example. This liability loss exposure is A) premises and operations […]
Which form of organization is free of initial legal requirements? A) general partnership B) sole proprietorship C) corporation D) both A and B ANSWER D
A money market deposit account (MMDA) is A) a limited-access savings account with a minimum balance requirement offering money market rates. B) the statement a money market mutual fund sends you showing activity in your account. C) any savings account at a federally-insured financial institution that offers higher rates but is not insured. D) similar […]