Ellen believes the value of the loss to her home is $30,000. The insurer has offered $18,000 to settle the loss. If Ellen and the insurer cannot agree on the value of the loss, which homeowners policy provision specifies how this dispute will be settled? A) insurer’s option B) appraisal clause C) loss payment clause […]
A corporate treasurer is typically responsible for each of the following duties EXCEPT A) cost accounting. B) capital expenditures. C) credit management. D) cash management. ANSWER A
Linda wants to purchase a homeowners policy. She has some valuable personal property to which internal policy limits apply. Her agent said that she could obtain coverage under her homeowners policy by attaching a list of this valuable property with specific amounts of insurance. Such a listing is called a(n) A) binder. B) schedule. C) […]
Jensen Inc. has net earnings of $24,000,000 this year and a dividend payout policy of 40% of earnings. If the firm follows its regular payout policy what will be the addition to retained earnings this year? A) $9,600,000 B) $12,000,000 C) $14,400,000 D) $16,000,000 ANSWER C Explanation: C) Addition to R/E = Net […]
Operating activities are concerned with: A) determining whether a company’s assets should be financed with debt or equity. B) managing a firm’s cash budgeting procedures. C) managing a firm’s working capital. D) planning sales of a corporation’s equity capital. ANSWER C
If the interest rate is positive, then the future value of an annuity due will be greater than the future value of an ordinary annuity. Indicate whether the statement is true or false ANSWER TRUE
If the future value of an annuity is known, then the present value of the annuity can be found using the present value of a lump sum formula, even if the amount of each annuity payment is unknown. Indicate whether the statement is true or false ANSWER TRUE
Mike and Susan built their “dream home.” They insured their home for its full replacement cost. They also added an endorsement that will pay up to an additional 20 percent of the policy limit in case the cost of rebuilding the home after a loss is greater than the policy limit. The basis under which […]
Cantanna Inc, is developing a pro forma income statement for the coming year. The chief financial officer estimates that fixed assets are $70,000,000 and that sales will be $300,000,000. If depreciation is historically 20% of fixed assets, what is the expected amount of depreciation for the upcoming year (in dollars)? A) $14,000,000 B) $20,000,000 C) […]
Jose and Maria would like “open-perils” coverage on their home and their personal property. Which unendorsed homeowners form provides this coverage? A) Homeowners 2 B) Homeowners 3 C) Homeowners 4 D) Homeowners 5 ANSWER Answer: D
