1. If you put $290 in a savings account at the beginning of each year for 13 years, how much money will be in the account at the end of the 13th year? Assume that the interest rate is 10.
a. 72
b. 722.75
c. 822.75
d. 7,822.75
2. You want to have $31,664 in cash to buy a car in 4 years. You expect to earn 11.5% per year on your savings. How much do you need to deposit today if this is the only money you save for this purpose?
a. 10,600
b. 17,486.34
c. 25,486.43
d. 20,486.43
3. As the required rate of return is increased, the:
a. PV increases, FV decreases
b. PV decreases, FV increases
c. PV decreases, FV decreases
d. PV increases, FV increases
4. ABC Company earned $851,597 in taxable income for the year. How much tax does the company owe on this income?
a. 48,542
b. 18,592.94
c. 200,042.79
d. 289,542.98
5. Consider a 12-year loan with annual payments at 5%. If the loan amount is $250,000, compute the interest paid in the eighth year.
a. 6,000
b. 6,200.73
c. 6,500
d. 6,105.94
6. ABC Company has a debt-equity ratio of 1.04. What is the debt ratio?
a. 21.54
b. 34.21
c. 50.98
d. 12.52
7. Which one of the following statements about a limited partnership is correct?
a. The partnership is managed on a daily basis by its limited partners.
b. Each limited partnership must have at least one general partner.
c. The partnership has an unlimited life.
d. All partners have limited liability for partnership debts.
e. Partnership profits are taxed the same as corporate profits.
8. ABC Inc. has sales of $251,688, costs of $112,324, depreciation expense of $21,391, and interest paid of $49,571. The tax rate is 37 percent. How much net income did the firm earn for the period?
a. 30,093.26
b. 43,093.26
c. 45,600
d. 1,239
9. The ABC Company has a net profit margin of 6.39 percent on sales of $311,671. The company has 14,700 shares of stock outstanding at a market price of $16.1 per share. What is the price-earnings ratio?
a. 11.88
b. 15.35
c. 13.73
d. 21