Financial statement analysis is one of the fundamental concepts that a nonfinancial manager should understand in order to: A) better assess the current environment in which the firm operates. B) better assess the future financing requirements. C) better understand the role of capital markets in raising long-term funds. D) better measure and create value for […]
You decide to borrow $250,000 to build a new home. The bank charges an interest rate of 8% compounded monthly. If you pay back the loan over 30 years, what will your monthly payments be (rounded to the nearest dollar)? A) $1,237 B) $1,123 C) $1,687 D) $1,834 ANSWER D
Which of the following is (are) included in the common declarations page of a commercial package policy? I. A description of the insured property II. A listing of the causes-of-loss that are covered by the policy A) I only B) II only C) both I and II D) neither I nor II ANSWER […]
All of the following are typically advantages of private placements EXCEPT A) reduced flotation costs. B) speed. C) financial flexibility. D) the possibility of future SEC registration. ANSWER D
Assume you are to receive a 10-year annuity with annual payments of $1000. The first payment will be received at the end of Year 1, and the last payment will be received at the end of Year 10. You will invest each payment in an account that pays 9 percent compounded annually. Although the annuity […]
Andrea purchased an auto insurance policy with bodily injury liability limits of 250/500 ($250,000/$500,000). She also purchased a personal umbrella policy with a $1 million limit and a $500 self-insured retention. Andrea was talking on her cell phone while driving, and her car struck and killed a pedestrian in a crosswalk. The court ordered her […]
All of the following are ISO personal umbrella liability policy exclusions EXCEPT A) liability arising out of uncompensated board service for a nonprofit organization. B) liability arising out of expected or intentional injury. C) liability arising out of business operations. D) liability arising out of operation of watercraft not covered by an underlying policy. […]
You charged $1,000 on your credit card for Christmas presents. Your credit card company charges you 26% annual interest, compounded monthly. If you make the minimum payments of $25 per month, how long will it take (to the nearest month) to pay off your balance? A) 54 months B) 40 months C) 94 months D) […]
When estimating a cash budget, which of the following items should the firm NOT include in the process? A) dividends B) taxes paid by the firm C) wages D) All of the above should be included ANSWER D
Which of the following statements is (are) true with regard to an unendorsed ISO Dwelling Form? I. The Dwelling forms provide theft coverage and personal liability insurance. II. The Dwelling 3 form provides broader property coverage than the Dwelling 1 form. A) I only B) II only C) both I and II D) neither I […]
