08 May WHAT IS THE FUTURE VALUE OF $1 500 AFTER 5 YEARS IF THE APPROPRIATE INTEREST RATE IS 6% COMPOUNDED SEMIANNUALLY?
Question 10What’s the rate of return you would earn if you paid $950 for a perpetuity that pays $85 per year?6.52%7.25%8.05%8.95%9.84%Question 11 What is the future value of $1 500 after 5 years if the appropriate interest rate is 6% compounded semiannually?$1 819.33$1 915.08$2 015.87$2 116.67$2 222.50Question 12What annual payment would you have to receive in order to earn a 7.5% rate of return on a perpetuity that has a cost of $1 250?$89.06$93.75$98.44$103.36$108.53Question 13Suppose you are buying your first house for $210 000 and are making a $20 000 down payment. You have arranged to financethe remaining amount with a 30-year monthly payment amortized mortgage at a 6.5% nominal interest rate. What will your equal monthly payments be (principal plus interest excluding taxes and insurance)?$1 083.84$1 140.88$1 200.93$1 260.98$1 324.02Question 14Your child’s orthodontist offers you two alternative payment plans. The first plan requires a $4 000 immediate up-front payment. The second plan requires you to make monthly payments of $137.41 payable at the end of each month for 3 years. What nominal annual interest rate is built into the monthly payment plan?12.31 .96 .64 .36 .08%Question 15Your sister turned 35 today and she is planning to save $5 000 per year for retirement with the first deposit to be made one year from today. She will invest in a mutual fund that will provide a return of 8% per year. She plans to retire 30 years from today when she turns 65 and she expects to live for 25 years after retirement to age 90. Under these assumptions how much can she spend in each year after she retires? Her first withdrawal will be made at the end of her first retirement year$47 888$50 408$53 061$55 714$58 500Question 16Other things held constant which of the following actions would increase the amount of cash on a company’s balance sheet?The company repurchases common stock.The company pays a dividend.The company issues new common stock.The company gives customers more time to pay their bills.The company purchases a new piece of equipment.Question 17On its 2007 balance sheet Barngrover Books showed $510 million of retained earnings and exactly that same amount was shown the following year. Assuming that no earnings restatements were issued which of the following statements is CORRECT?If the company lost money in 2007 they must have paid dividends.The only possibility is that the company had zero net income in 2007.The company must have paid out half of its earnings as dividends.The company must have paid no dividends in 2007.Dividends could have been paid in 2007 but they would have had to equal the earnings for the year.Question 18A security analyst obtained the following information from Prestopino Products’ financial statements:â?¢ Retained earnings at the end of 2006 were $700 000 but retained earnings at the end of 2007 had declined to $320 000.â?¢ The company does not pay dividends.â?¢ The company’s depreciation expense is its only non-cash expense; it has no amortization charges.â?¢ The company has no non-cash revenues.â?¢ The company’s net cash flow (NCF) for 2007 was $150 000.On the basis of this information which of the following statements is CORRECT?Prestopino had negative net income in 2007Prestopino’s depreciation expense in 2007 was less than $150 000.Prestopino had positive net income in 2007 but its income was less than its 2006 income.Prestopino’s NCF in 2007 must be higher than its NCF in 2006.Prestopino’s cash on the balance sheet at the end of 2007 must be lower than the cash it had on the balance sheet at the end of 2006.Question 19Which of the following statements is CORRECT?The income of certain small corporations that qualify under the Tax Code is completely exempt from corporate income taxes. Thus the federal government receives no tax revenue from these businesses.All businesses regardless of their legal form of organization are taxed under the Business Tax Provisions of the Internal Revenue Code.Small businesses that qualify under the Tax Code can elect not to pay corporate taxes but then their owners must report their pro rata shares of the firm’s income as personal income and pay taxes on that income.Congress recently changed the tax laws to make dividend income received by individuals exempt from income taxes. Prior to the enactment of that law corporate income was subject to double taxation where the firm was first taxed on the income and stockholders were taxed again on the income when it was paid to them as dividends.All corporations other than non-profit corporations are subject to corporate income taxes which are 15% for the lowest amounts of income and 35% for the highest amounts of income.Question 20Which of the following statements is CORRECT?Dividends paid reduce the net income that is reported on a company’s income statement.If a company uses some of its bank deposits to buy short-term highly liquid marketable securities this will cause a decline in its current assets as shown on the balance sheet.If a company issues new long-term bonds during the current year this will increase its reported current liabilities at the end of the year.Accounts receivable are reported as a current liability on the balance sheet.If a company pays more in dividends than it generates in net income its retained earnings as reported on the balance sheet will decline from the previous year’s balance.Question 21Hunter Manufacturing Inc.’s December 31 2006 balance sheet showed total common equity of $2 050 000 and 100 000 shares of stock outstanding. During 2007 Hunter had $250 000 of net income and it paid out $100 000 as dividends. What was the book value per share at 12/31/07 assuming that Hunter neither issued nor retired any common stock during 2007?$20.90$22.00$23.10$24.26$25.47Question 22Frederickson Office Supplies recently reported $12 500 of sales $7 250 of operating costs other than depreciation and $1 250 of depreciation. The company had no amortization charges and no non-operating income. It had $8 000 of bonds outstanding that carry a 7.5% interest rate and its federal-plus-state income tax rate was 40%. How much was the firm’s taxable income or earnings before taxes (EBT)?$3 230.00$3 400.00$3 570.00$3 748.50$3 935.93Question 23You observe that a firm’s ROE is above the industry average but its profit margin and debt ratio are both below the industry average. Which of the following statements is CORRECT?Its total assets turnover must be above the industry average.Its return on assets must equal the industry average.Its TIE ratio must be below the industry average.Its total assets turnover must be below the industry average. Its total assets turnover must equal the industry average.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.