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##### Strayer FIn100 week 3 quiz

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Question;1.;Which of;these can be used by interested parties to identify changes in corporate;performance?;Common-size financial;statements;Industrialized financial statements;Sanitized financial statements;None of these;Top of Form;2.;A deposit of $300 earns interest rates;of 7 percent in the first year and 10 percent in the second year. What would be;the second year future value?;$651.00;$351.00;$602.17;$353.10;3.;A small business owner visits his bank to ask;for a loan. The owner states that she can repay a loan at $1,500 per month for;the next 3 years and then $500 per month for three years after that. If the;bank is charging customers 10 percent APR, how much would it be willing to lend;the business owner?;$61,982.47;$32,019.95;$192,119.70;$57,980.57;Top of Form;4.;Which ratio measures the number of;dollars of sales produced per dollar of inventory?;Internal-growth;Inventory turnover;Asset management;Cash;5.;Due to;poor spending habits, Ricky has accumulated $10,000 in credit card debt. He has;missed several payments and now the annual interest rate on the card is 18.95;percent! If he pays $175 per month on the card, how long will it take Ricky to;pay off the card?;148.50 months;Ricky never pays off the card.;162.5 months;6.;What is the present value of a $7,000 payment made in six years when the;discount rate is 4 percent?;$5,290.42;$5,802.82;$6,103.73;$5,532.20;121.5 months;7.;What is;the present value, when interest rates are 6.5 percent, of a $100 payment made;every year forever?;$1,538.46;$1,000.00;$650.00;$6.50;8.;We call the process of earning interest;on both the original deposit and on the earlier interest payments;discounting.;multiplying.;computing.;compounding.;9.;A;mortgage broker is offering a 30-year mortgage with a teaser rate. In the;first two years of the mortgage, the borrower makes monthly payments on only;a 5 percent APR interest rate. After the second year, the mortgage interest;charged increases to 8 percent APR. What is the effective interest rate in;the first two years? What is the effective interest rate after the second;year?;5.00 percent, 8.00 percent respectively;5.12 percent, 8.30;percent respectively;12.59 percent, 12.65 percent respectively;4.89 percent, 7.72 percent respectively;10.;Approximately what interest rate is needed to;double an investment over four years?;100 percent;18;percent;4 percent;25 percent;Top of Form;11.;What annual interest rate would you need to earn if;you wanted a $200 per month contribution to grow to $14,700 in five years?;6.47 percent;14.70 percent;8.01 percent;7.76 percent;Top of Form;12.;What is the future value of $700;deposited for one year earning 4 percent interest rate annually?;$28;$700;$1,428;$728;13.;When;computing the rate of return from selling an investment, the number of years;between the present and future cash flows is an important factor in;determining;the annual payments required.;whether the present value or the future value is a cash outflow.;the annual rate;earned.;whether the present value or the future value is a cash inflow.;14.;If you;start making $115 monthly contributions today and continue them for six years;what is their present value if the compounding rate is 12 percent APR? What is;the present value of this annuity?;$5,633.10;$5,941.12;$5,882.30;$5,512.90;15.;Which;of these ratios measure the extent to which the firm uses debt (or financial;leverage) versus equity to finance its assets?;Equity ratios;Liquidity ratios;Debt management ratios;Financial ratios;16.;What is the present value of a $200 payment made in 3 years when the;discount rate is 8 percent?;$515.42;$150.00;$158.77;$251.94;17.;You are;considering a stock investment in one of two firms (A and B), both of which;operate in the same industry. A finances its $20 million in assets with $18;million in debt and $2 million in equity. B finances its $20 million in assets;with $2 million in debt and $18 million in equity. Calculate the equity;multiplier for the two firms.;Firm A: 10 times, Firm B: 1.11 times;Firm A: 10 times, Firm B: 9.99 times;Firm A: 15 times, Firm B: 1.00 times;Firm A: 20 times, Firm B: 1.11;times;18.;Determine;the interest rate earned on a $450 deposit when $475 is paid back in one year.;0.89 percent;1.13 percent;5.56 percent;13.0 percent;19.;Which;of the following is NOT true when developing a time line?;Cash inflows are designated with a positive number.;The time line shows the magnitude of cash flows at different points;in time.;Cash outflows are;designated with a positive number.;The cost is known as the interest rate.;Bottom of Form;20.;Which of the following refer to ratios that measure;the relationship between a firm's liquid (or current) assets and its current;liabilities?;Internal growth;Market value;Liquidity;Cross-section;21.;Consider that you are 30 years old and have just;changed to a new job. You have $91,000 in the retirement plan from your former;employer. You can roll that money into the retirement plan of the new employer.;You will also contribute $4,800 each year into your new employer's plan. If the;rolled-over money and the new contributions both earn a 7 percent return, how;much should you expect to have when you retire in 38 years?;$2,106,718.60;$2,018,506.60;$2,012,560.60;$2,216,781.60;Top of Form;22.;Which of the following refers to the;amount of debt versus equity a firm has on its balance sheet?;Capital structure;Debt structure;Financial structure;Capital coverage;23.;A small business owner visits his bank to ask for a loan. The owner;states that she can repay a loan at $2,500 per month for the next two years and;then $3,000 per month for another two years after that. If the bank is charging;customers 6.5 percent APR, how much would it be willing to lend the business;owner?;$117,809.63;$115,278.17;$114,009.21;$111,712.39;24.;Which of the following measures the operating;return on the firm's assets, irrespective of financial leverage and taxes?;Return on assets;Basic earnings power;ratio;Return on equity;Profit margin;25.;With regard to money deposited in a bank;future values are;are completely independent of present;values.;equal to future values.;larger than present values.;smaller than present values.;26.;Which is true? Ratio analysis;can provide useful information on a firm's past but not current;position.;can provide useful information on a firm's past and current position;but should never be used to forecast future performance.;can provide;useful information on a firm's current position and hint at future;performance.;can provide useful information on a firm's current position but should;never be used to forecast future performance.;27.;Which;ratio measures a firm's ability to pay short-term obligations with its;available cash and market securities?;Current;Cash;Quick or acid test;Internal-growth;28.;Loan amortization schedules show;the interest paid per period only.;both the principal;balance and interest paid per period.;the principal balance paid per period only.;the present value of the payments due.;29.;To;compute the present or future value of an annuity due, one computes the value;of an ordinary annuity and then;divides it by (1 - i).;multiplies it by (1 + i).;multiplies it by (1 - i).;divides it by (1 + i).;Bottom of Form;Bottom of Form;Bottom of Form;Bottom of Form;Top of Form;30.;A firm reported year-end sales of $20;million. It listed $7 million of inventory on its balance sheet. Using a;365-day year, how many days did the firm's inventory stay on the premises?;127.75 days;157.75 days;97.75 days;87.75 days;Bottom of Form

Paper#48479 | Written in 18-Jul-2015

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