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
Financing activities are concerned with: A) determining whether a company’s assets should be financed with debt or equity. B) managing a firm’s cash management procedures. C) managing a firm’s working capital. D) planning sales of a corporation’s equity capital. ANSWER A
Which of the following statements about covered perils and loss settlement under an unendorsed Homeowners 3 policy is true? A) The dwelling is covered on a named-perils basis. B) Personal property losses are settled on an actual cash value basis. C) Losses to the dwelling are always settled on an actual cash value basis. D) […]
All of the following statements about the cancellation of a Homeowners 3 policy are true EXCEPT A) The insurer may cancel a new policy for any reason if it has been in force for less than 60 days and is not a renewal policy. B) At least 100 days’ notice of cancellation must be given […]
Investing activities are concerned with: A) how a firm can best manage its cash flows as they arise in its day-to-day operations. B) vice president of productions and operations. C) managing a firm’s cash budgeting procedures. D) managing a firm’s working capital. ANSWER C
The two principal sources of financing for corporations are A) cash and common equity. B) debt and equity. C) common equity and preferred equity. D) debt and accounts payable. ANSWER B