The owners of a corporation enjoy limited liability. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
You have the choice of two equally risk annuities, each paying $5,000 per year for 8 years. One is an annuity due and the other is an ordinary annuity. If you are going to be receiving the annuity payments, which annuity would you choose to maximize your wealth? A) the annuity due B) the ordinary […]
Date: September 19th, 2020
A corporate financial manager who is trying to create value for its shareholders: A) is not concerned with ethics but rather with writing iron-clad contracts. B) can safely ignore ethics as long as no laws are broken. C) must behave ethically to stay out of jail. D) is concerned with ethics because unethical behavior destroys […]
Date: September 19th, 2020
Rob’s income was $20,000 in 2005 and $22,000 in 2006. If inflation was 6% in 2006, then we can say that Rob’s 2006 income A) simply matched the inflation rate. B) fell behind the inflation rate. C) exceeded the inflation rate by 4%. D) lagged the inflation rate by 2%. ANSWER C
Date: September 19th, 2020
Which of the following statements concerning FAIR plans is (are) true? I. All property is eligible for coverage regardless of physical condition. II. Losses and expenses are shared by insurers who participate in a plan. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: […]
Date: September 19th, 2020
What are a firm’s two principal sources of financing? Of what do these sources consist? What will be an ideal response? ANSWER The total assets represent the resources owned by the firm, and total liabilities and total shareholders’ equity indicate how those resources were financed. Debt is money that has been borrowed and […]
Date: September 19th, 2020
Steve and Mary are art collectors. They own lithographs, etchings, and vintage photographs valued at over $250,000. Steve and Mary display their art collection at their home. They can insure this valuable personal property through a A) title insurance policy. B) dwelling property form. C) personal articles floater form. D) personal umbrella policy. […]
Date: September 19th, 2020
A stock with a beta of 1.4 has 40% more variability in returns than the average stock. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following would be most likely to align the interests of managers and shareholders? A) Fixed but high salaries B) Large bonuses C) Stock options D) None of the above ANSWER C
Date: September 19th, 2020
Prepare a balance sheet using the information given below. Make sure to identify current assets, net fixed assets, total assets, current liabilities, long-term debt, total equity, and total liabilities and equity. Gross fixed assets $40,000 Cash $18,000 Other assets $5,000 Accumulated depreciation $30,000 Common stock $43,000 Short-term notes payable $12,000 Accounts payable $35,000 Inventories $122,000 […]
Date: September 19th, 2020
