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##### general business data bank

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Question;Question 11;Shareholders probably have the most;interest in which one of the following sets of ratios?;A.;return on assets and profit margin;B.;long-term debt and times interest;earned;C.;price-earnings and debt-equity;D.;market-to-book and times interest;earned;E.;return on equity and price-earnings;Question 12;Al's Sport Store has sales of $897,400;costs of goods sold of $628,300, inventory of $208,400, and accounts receivable;of $74,100. How many days, on average, does it take the firm to sell its;inventory assuming that all sales are on credit?;A.;74.19 days;B.;84.76 days;C.;121.07 days;D.;138.46 days;E.;151.21 days;Question 13;You need to analyze a firm's;performance in relation to its peers. You can do this either by comparing the;firms' balance sheets and income statements or by comparing the firms' ratios.;If you only had time to use one means of comparison which method would you use;and why?;Question 14;The process of determining the;present value of future cash flows in order to know their worth today is called;which one of the following?;A.;compound interest valuation;B.;interest on interest computation;C.;discounted cash flow valuation;D.;present value interest factoring;E.;complex factoring;Question 15;You invested $1,400 in an account;that pays 5 percent simple interest. How much more could you have earned over a;20-year period if the interest had compounded annually?;A.;$749.22;B.;$830.11;C.;$882.19;D.;$901.15;E.;$914.62;Question 16;You just received $225,000 from an;insurance settlement. You have decided to set this money aside and invest it;for your retirement. Currently, your goal is to retire 25 years from today. How;much more will you have in your account on the day you retire if you can earn;an average return of 10.5 percent rather than just 8 percent?;A.;$417,137;B.;$689,509;C.;$1,050,423;D.;$1,189,576;E.;$1,818,342;Question 17;When you retire 40 years from now;you want to have $1.2 million. You think you can earn an average of 12 percent;on your investments. To meet your goal, you are trying to decide whether to;deposit a lump sum today, or to wait and deposit a lump sum 2 years from today.;How much more will you have to deposit as a lump sum if you wait for 2 years;before making the deposit?;A.;$1,414.14;B.;$2,319.47;C.;$2,891.11;D.;$3,280.78;E.;$3,406.78;Question 18;An ordinary annuity is best defined by;which one of the following?;A.;increasing payments paid for a;definitive period of time;B.;increasing payments paid forever;C.;equal payments paid at regular;intervals over a stated time period;D.;equal payments paid at regular;intervals of time on an ongoing basis;E.;unequal payments that occur at set;intervals for a limited period of time;Question 19;You are considering two lottery payment;options: Option A pays $10,000 today and Option B pays $20,000 at the end of;ten years. Assume you can earn 6 percent on your savings. Which option will you;choose if you base your decision on present values? Which option will you;choose if you base your decision on future values? Explain why your answers are;either the same or different.;Question 20;You have been investing $250 a month for;the last 13 years. Today, your investment account is worth $73,262. What is;your average rate of return on your investments?;A.;8.94 percent;B.;9.23 percent;C.;9.36 percent;D.;9.41 percent;E.;9.78 percent

Paper#45021 | Written in 18-Jul-2015

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