A financial advisor tells you that you can make your child a millionaire if you just start saving early. You decide to put an equal amount each year into an investment account that earns 7.5% interest per year, starting on the day your child is born. How much would you need to invest each year […]
XYZ, Inc. would suffer serious financial consequences if either of its two major customers were shut down and could not purchase XYZ products. Which of the following types of consequential loss protection would provide protection against this exposure? A) leasehold interest B) extra expense C) marine insurance D) business income from dependent properties […]
The beta of a T-bill is zero. Indicate whether the statement is true or false ANSWER TRUE
The ability to identify the key industry drivers of success is a fundamental concept that a nonfinancial manager should understand in order to: A) better assess the current environment in which the firm operates. B) better assess future financing requirements. C) better understand the role of capital markets in raising long-term funds. D) better measure […]
A cash budget is often more valuable as a LONG-term rather than a SHORT-TERM financial forecasting vehicle. Indicate whether the statement is true or false ANSWER FALSE
A 65 year-old man is retiring and can take either $500,000 in cash or an ordinary annuity that promises to pay him $50,000 per year for as long as he lives. Which of the following statements is MOST correct? A) The higher the interest rate, the more likely the man will prefer the $500,000 lump […]
The building and personal property coverage form provides several optional coverages. Under one optional coverage, no deduction is taken for depreciation when settling a covered loss. This optional coverage is called A) extra expense. B) agreed value. C) replacement cost. D) inflation guard. ANSWER Answer: C
Which of the following statements about the provisions of the building and personal property coverage form is (are) true? I. A separate deductible must be satisfied for each building damaged in the same occurrence. II. Under the replacement cost option, there is no deduction for depreciation. A) I only B) II only C) both I […]
Which of the following statements about the extra expense coverage form is (are) true? I. It provides coverage for the increased cost that must be paid to continue operations during a period of restoration. II. It provides coverage for lost business income if a key customer or key supplier experiences a loss. A) I only […]
Based on the information in Table 4-1, the total asset turnover ratio is A) 1.41. B) 1.11. C) 2.33. D) 4.45. ANSWER B