You want to save $200 a month for the next 24 years and hope to earn an average rate
of return of 11 percent. How much more will you have at the end of the 24 years if you
invest your money at the beginning of each month rather than the end of each month?
A. $1,611.29
B. $1,807.70
C. $2,238.87
D. $2,569.14
E. $2,707.27
What is the net present value of the following set of cash flows at a discount rate of 7
percent? At 20 percent?
A. $4,518.47; $628.30
B. $4,518.47; -$321.76
C. $4,518.47; -$525.13
D. $4,722.09; $504.21
E. $4,722.09; -$418.05
The Veggie Hut has net income of $26,400, total equity of $102,700, and total assets of
$189,500. The dividend payout ratio is 0.30. What is the internal growth rate?
A. 7.99 percent
B. 8.57 percent
C. 10.81 percent
D. 16.87 percent
E. 21.94 percent
Which one of the following is most commonly used in international trades?
A. Sight draft
B. Time draft
C. Commercial paper
D. Bankers acceptance
E. Open account
International Travel Services has net income of $48,400, total assets of $219,000, total
equity of $154,800, and total sales of $411,700. What is the common-size percentage
for the net income?
A. 9.00 percent
B. 11.76 percent
C. 15.53 percent
D. 22.10 percent
E. 850.62 percent
Which one of the following statements is true concerning the price-earnings (PE) ratio?
A. A high PE ratio may indicate that a firm is expected to grow significantly.
B. A PE ratio of 16 indicates that investors are willing to pay $1 for every $16 of
current earnings.
C. PE ratios are unaffected by the accounting methods employed by a firm.
D. The PE ratio is classified as a profitability ratio.
E. The PE ratio is a constant value for each firm.
Blooming Gardens has an inventory turnover of 16. This means the firm:
A. sells its entire inventory every 16 days.
B. stocks its inventory only every 16 days.
C. buys 16 days of inventory with each order.
D. sells its inventory by granting customers 16 days credit.
E. sells its inventory an average of 16 times each year.
The manager of Glorias Boutique has approved Carlas application for credit. The
maximum payment that has been approved is $65 a month for 24 months. The APR is
15.7 percent. What is the maximum initial purchase that Carla can make given this
credit approval?
A. $1,288.90
B. $1,300.00
C. $1,331.42
D. $1,350.00
E. $1,428.46
What is the market called that allows shareholders to resell their shares to other
investors?
A. Primary
B. Proxy
C. Secondary
D. Inside
E. Initial
Which of the following features are advantages of the dividend growth model?I. Easy
to understandII. Model simplicityIII. Constant dividend growth rateIV. Models
applicability to all common stocks
A. II only
B. I and III only
C. II and IV only
D. I and II only
E. I, II, and III only
The Paint Ball Range, Inc. paid $30,500 in dividends and $7,600 in interest over the
past year. Sales totaled $211,800 with costs of $167,900. The depreciation expense was
$16,500. The applicable tax rate is 34 percent. What is the amount of the operating cash
flow?
A. $14,232
B. $15,306
C. $28,222
D. $37,168
E. $40,568
A bond has a $1,000 face value, a market price of $1,045, and pays interest payments of
$80 every year. What is the coupon rate?
A. 6.76 percent
B. 7.00 percent
C. 7.12 percent
D. 8.00 percent
E. 8.14 percent