What is the internal rate of return for a project that requires an initial outlay of $92,000
and generates a single cash inflow of $25,750 in 5 years?
A.10%
B.12%
C.15.3%
D.13.1%
A bond with a face value of $1,000 has annual coupon payments of $100 and was
issued 7 years ago. The bond currently sells for a premium and has 8 years left to
maturity. This bond’s ____ must be less than 10%.
I. yield to maturity
II. current yield
III. coupon rate
A.I only
B.II only
C.III only
D.II and III only
E.I and II only
Market risk is:
A.caused by things that affect all stocks.
B.the chance that an investor will lose money in the stock market.
C.diversified away.
D.the variance of the probability distribution.
Depreciation expense of $2,000.00 will cause:
A.accounts receivable to be reduced by $2,000.00.
B.cash to be reduced by $2,000.00.
C.accumulated Depreciation to increase by $2,000.00.
D.accounts Payable to increase by $2,000.00.
Which of the following reasons for holding cash is not under the control of
management as a matter of policy?
A.Transaction demand
B.Precautionary demand
C.Speculative demand
D.Compensating balances
E.All of these reasons are under the complete control of management.
If a vendor’s invoice states terms of sale of 2/10 net 30, the implied annual cost of
interest from foregoing the discount would be:
A.18.25%
B.2.0%
C.12%
D.36.5%
As per FASB 13, which of the following is a rule for a lease to qualify as an operating
lease?
A.There is a transfer of ownership at lease expiration.
B.There is a bargain purchase option.
C.The lease term is for over 75% of the asset’s economic life.
D.The present value of lease payments is less than 90% of the fair market value at lease
origination.
When must a vendor be paid in full under the terms of 2/10, n. 30?
A.10 days from today
B.On February 10th
C.On the 30th of the current month
D.30 days from today
Financial assets can be distinguished from real assets in that financial assets:
A.are pieces of paper rather than tangible, physical objects.
B.are not intended to provide services like transportation or shelter.
C.have value because they provide their owners with claims to future cash flows.
D.All of the above
You are considering the purchase of Sanders Corp., a constant growth stock. The stock
paid a current price of $3.00. The next year’s stock price is expected to be $3.18. If the
stock is returning 15%, calculate its dividend yield.
A.6%
B.7%
C.8%
D.9%