business managment data bank

Question
	
Multiple Choice Questions



 Use the following to
answer questions 105-108:

Healthy
Day Regional Medical Center's management team has several decisions to make.
They are attempting to sort out what to do first. The decisions are as follows:

Determine
which patients to be admitted for the next day.

Decide
whether or not to purchase the only other medical center in their region.

Decide
which candidates will meet the requirements for the nursing training program.

Determine
whether the medical center should diversify into more advanced (and
substantially more costly) technologies.

 

105. (p. 89) The decisions
in Scenario A can all be classified as either:

A. Risky
or non-risky

B. Programmed or nonprogrammed

C. Easy or difficult

D. Necessary or not necessary

E. Certain or uncertain

 



 

106. (p. 89) Decision
4 is an example of which type of decision? 

A. Programmed

B. Nonprogrammed

C. Trivial

D. Certain

E. None of the above is correct

 







107. (p. 89) Decisions
1 and 3 are both ____________ decisions because ____________________. 

A. Programmed decisions; they are novel and complex

B. Nonprogrammed decisions; they are novel and complex

C. Programmed decisions; they are can be solved using rules and procedures

D. Nonprogrammed decisions; they are novel and complex

E. None of the above is correct

 

 

108. (p. 95) If
the decision makers for Decision 3 take the first candidate they see that meets
the minimum requirements, without going through every candidate's file to see
if anyone else is better, they are _____________. 

A. Maximizing

B. Satisficing

C. Optimizing

D. Experiencing internal conflict

E. Experiencing external conflict

 







 Use the following to
answer questions 109-111:

You work for a new start-up software design firm. There are five
highly-opinionated but very committed employees in your group. The owner firmly
believes that she should make every decision since she is, as she often says,
"the one who signs the checks." You and one of your colleagues agree
that the owner is wrong in many of her management decisions. It has become a
very emotional and personal issue for all of you. At this point, most people in
the firm agree that the decision making of everyone involved has been compromised.

 







109. (p. 100) The
owner's belief that she should make every decision herself is: 

A. The right thing to do

B. A common mistake that leads to failed decision making by entrepreneurs

C. An example of vigilance

D. The reason group decision making is almost never a good idea

E. None of the above

 

 

110. (p. 100) Suppose
the owner tells you that the reason she makes every decision herself is because
she believes that she can control what happens in the business. This
unrealistic view is called: 

A. Framing effects

B. Discounting the future

C. Time pressures

D. Illusion of control

E. Disillusionment

 







111. (p. 105) If,
in the beginning of your work with the company, your differences with the owner
were purely based on differences in judgment, but have now deteriorated to the
point that your differences are more emotional and directed personally toward
one another, it can be said that you initially experienced _______________ but
now are experiencing ________________. 

A. Satisficing; maximizing

B. Cognitive conflict; affective conflict

C. Affective conflict; cognitive conflict

D. Maximizing, satisficing

E. Uncertainty; certainty

 







 Use the following to
answer questions 112-114:

XYZ Corporation has hired a consultant to help them with organizational
decision making. The consultant's first meeting is set up to describe to the
managers of XYZ Corp. the models of organizational decision processes. Each of
the managers seems to prefer one of the models over the others.

 

112. (p. 108) The
President of XYZ Corp. responds most positively to the model that is most
cautious. He explains that the budget process is the easiest decision for him
because you break it into smaller pieces and build the decisions as you go. The
President seems to prefer which model? 

A. Bounded rationality

B. Incremental model

C. Garbage can model

D. Coalitional model

E. Crisis model

 







113. (p. 108) The
Vice President for Human Performance believes that the most important model of
decision making is the one which acknowledges that decision makers cannot be
truly rational. She tells the group that she sees many situations with managers
who don't have enough time to process all the relevant information and who
regularly face very complex problems. She seems to prefer which model of organizational
decision processes? 

A. Bounded rationality

B. Incremental model

C. Garbage can model

D. Coalitional model

E. Crisis model

 







114. (p. 108) The
Vice President of Production tells the group that in his area of the company,
many managers don't even agree about what their goals are and certainly cannot
agree on what action to take. His managers are using which model of decision
making? 

A. Bounded rationality

B. Incremental model

C. Garbage can model

D. Coalitional model

E. Crisis model

 

 
	

finance homework help!

Question
	Problem 14-1 Dividends and Stock Prices [LO 2] Your portfolio is 200 shares of Sunny Morning, Inc. The stock currently sells for $90 per share. The company has announced a dividend of $2.10 per share with an ex-dividend date of April 19.
Required:Assuming no taxes, how much will your stock be worth on April 19? (Do not include the dollar sign ($).)
 Stock value	$ 





Problem 14-3 Dividends and Taxes [LO 2] Palmer, Inc., has declared a $6.70 per share dividend. Suppose capital gains are not taxed, but dividends are taxed at 30 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. Palmer sells for $118 per share, and the stock is about to go ex-dividend.
Required:What do you think the ex-dividend price will be? (Do not include the dollar sign ($). Round your answer to 2 decimal places (e.g., 32.16).)
 Ex-dividend price	$ 

















Problem 14-4 Stock Dividends [LO 3] The owners’ equity accounts for Trans World International are shown here:
	 Common stock ($1 par value)	 	$	100,000	 Capital surplus	 	 	206,000	 Retained earnings	 	 	680,000		________________________________________	________________________________________	________________________________________	________________________________________ Total owners’ equity	 	$	986,000		________________________________________________________________________________	________________________________________________________________________________	________________________________________________________________________________	________________________________________________________________________________________________________________________
Requirement 1:Assume Trans World stock currently sells for $32 per share and a 15 percent stock dividend is declared.(a)	How many new shares will be distributed?
 New shares issued	 

(b)	Show the new balance for the equity accounts. (Do not include the dollar signs ($).)
	 Common stock	 	$	 Capital surplus	 	 	 Retained earnings	 	 	 	________________________________________	________________________________________	________________________________________	________________________________________ Total owners’ equity	 	$	 	________________________________________________________________________________	________________________________________________________________________________	________________________________________________________________________________	________________________________________________________________________________________________________________________ Requirement 2:Now assume that instead Trans World declares a 20 percent stock dividend.(a)	How many new shares will be distributed?  New shares issued	 
 (b)	Show the new balance for the equity accounts. (Do not include the dollar signs ($).)
	 Common stock	 	$	 Capital surplus	 	 	 Retained earnings	 	 	 	________________________________________	________________________________________	________________________________________	________________________________________ Total owners’ equity	 	$	





Problem 14-6 Stock Splits and Stock Dividends [LO 3] Bermuda Triangle Corporation (BTC) currently has 370,000 shares of stock outstanding that sell for $100 per share. Assuming no market imperfections or tax effects exist. Required:Determine the share price and new number of shares outstanding if (Do not include the dollar signs ($). Round your price per share answers to 2 decimal places (e.g., 32.16) and other answers to the nearest whole number (e.g., 32).):(a)	BTC has a five-for-three stock split.  Price per share	 $ 
 Shares outstanding	 
 (b)	BTC has a 12 percent stock dividend.  Price per share	 $ 
 Shares outstanding	 
 (c)	BTC has a 38.0 percent stock dividend.  Price per share	 $ 
 Shares outstanding	 
 (d)	BTC has a four-for-seven reverse stock split.  Price per share	 $ 
 Shares outstanding	 


Requirement 1:What effect will this transaction have on the equity of the firm? (Do not include the dollar sign ($). Input the amount as positive value.)
 Will shareholders’ equity by $ 

Requirement 2:How many shares will be outstanding after the repurchase? (Round your answer to the nearest whole number (e.g., 32).)
 New shares outstanding	 

Requirement 3:What will the price per share be after the repurchase? (Do not include the dollar sign ($). Round your answer to 2 decimal places (e.g., 32.16).)
 Share price	$ 

Requirement 4:Is the share repurchase effectively the same as a cash dividend?


	

Question_Doc14_15Dec_15th

Question
	
5) Endangered species are likely to be

A) private property.

B) common property.

C) both private and common property.

D) neither private nor common property.



6) Protecting endangered species are likely to be

A) a private cost.

B) a public cost.

C) both private and public costs.

D) neither a private nor public cost.



7) Which of the following is TRUE about species in the
world?

A) Most extinct species became extinct within the past 30
years.

B) The majority of extinct species became extinct before
humans appeared.

C) Extinct species became extinct only after human appeared.

D) No species has ever become extinct.



8) The trade-off of saving the spotted owls in the Pacific
Northwest was

A) the loss of salmon in the region.

B) the increase in the number of marbled murrelets.

C) the loss of logging activities by lumber companies.

D) none.



9) Which of the following is most likely to be private
property?

A) bees

B) house flies

C) farm raised chickens

D) winds



10) Wild animals are likely to be

A) private property.

B) endangered species.

C) domesticated by humans.

D) all of the above.



11) The Endangered Species Act is an attempt to

A) protect endangered species against greedy loggers,
farmers, and business people.

B) protect endangered species from the overzealousness of
many environmentalists.

C) protect species endangered because there are no private
property rights on them.

D) prevent some people from earning a good living.



12) For endangered species, the federal government

A) can only protect the animal on federal property because
of common property issues.

B) has the right to regulate activities on private land to
save the species from extinction.

C) turns over the protection of an endangered species to the
state authorities where the species

lives.

D) will capture a pair of animals so that the species does
not become extinct.



13) Saving endangered species

A) benefits all people in society without any trade-off.

B) must involve the loss of another species.

C) may involve a trade-off in terms of the loss of other
economic activities.

D) requires the government to list those species as common
property.

14) The problem associated with endangered populations of
migratory birds is the

A) common property problem.

B) free rider problem.

C) deadweight loss problem.

D) inefficient production problem.



15) The problem of overfishing in waters that are commonly
owned can be solved by

A) the use of the Coase Theorem.

B) establishing property rights for fishing in the waters.

C) subsidizing fishing.

D) allowing the market to ration fish.



.

16) The problem of overfishing in waters that are commonly
owned can be solved when the

government determines the total amount of fish can be
removed from a given area during each

fishing season. Then the fishermen

A) will not be able to fish.

B) can trade their rights (shares) to fish or not.

C) will externalize their private costs to the government.

D) will lower their private costs to fish.



17) The Endangered Species Act has

A) caused a loss of economic activities on some private
land.

B) saved all endangered species without affecting anyone.

C) further reduced the number of endangered species.

D) had no impact on either the number of endangered species
or other economic activities.



18) Approximately what percentage of the world's extinct
species became extinct before humans

appeared on earth?

A) 1 percent

B) 10 percent

C) 20 percent

D) more than 99 percent



19) Today, the earth has ________ of all of the species that
have ever lived.

A) less than 1 percent

B) about 50 percent

C) about 99 percent

D) 100 percent



20) "The number of species on earth is decreasing
drastically and economic development is the

main factor for the problem." Do you agree or disagree?
Why?



21)
Why are most endangered species belong to common property?	

saint MBA560 test 8

Question
	
Problem 1. Creighton Company's balance sheet and income
statement are provided below:



 



Required:



1) Compute the margin, turnover, and return on investment for Creighton
Company.

2) What is the advantage of expanding the ROI formula to measure margin and
turnover separately?

Problem 2. Delta Company is
evaluating two different capital investments, Project X and Y. Either X or Y
would cost $100,000, and the company cannot afford to do both. The company
expects that Project X would provide net cash inflows of $30,000 per year for 5
years. For Project Y, the net cash inflows are expected to be as follows:



  



Delta's cost of capital is 12%



Required:
1) Calculate the present value index for Project
X and for Project Y.

2) Indicate whether each of the projects is an acceptable investment.

3) Which of the two projects should Delta implement?




	

post university ECO 201 macroeconomics all units discussions

Question
	


{replace these words with your own name here} Unit
1 Discussion Board





Top of Form



1. What is the opportunity cost of taking this
course?

2. Why is the benefit greater than the cost?



Bottom of Form









 Unit 2 Discussion Board





Top of Form



After reading the Government Data Releases, please
answer the following questions.

1.
What has been happening to the real GDP
over the past year?

2.
According to the CPI release, do we
have a serious inflation problem at the current time?



Bottom of Form











Anonymous

{insert your name here in place of "RE:"}
Unit 3 Discussion Board





Top of Form



After reading the required chapters for Unit 3,
please answer the following question in the discussion board.



1. Is it possible that the U.S. economy will, at some point, no longer be the
largest and most productive economy in the world?



After reading the article on Productivity Growth, please answer the following
question posted in the discussion board.



2. What do the authors think is the primary reason for the increase in
productivity growth after 1995?







Bottom of Form



 Unit 4 Discussion Board





Top of Form



One of the responses to the current economic
problems has been to extend the duration of unemployment compensation. Is this
a wise move?



Bottom of Form













 Unit 5 Discussion Board





Top of Form



Are
you as an individual better or worse off as a consequence of inflation?



Bottom of Form











Mr. D's Unit 6 Discussion Board





Top of Form



Do
you think the current imbalance between our exports and imports, with imports
significantly greater than exports, a good or bad condition?



Bottom of Form











 Unit 7 Discussion Board





Top of Form



Are
you in favor of all the "bailouts" — of banks, home-owners, auto
firms — that are being pursued in order to fix the economy?



Bottom of Form











Unit 8 Discussion Board





Top of Form



Do
you think it is appropriate for the Obama administration to be running such a
large federal deficit?
	

OPES Finance Quiz -30 MCQs

Question
	

Question 1 
1. A stock is expected to pay a year-end dividend of $2.00, i.e., D1 = $2.00. The dividend is expected to decline at a rate of 5% a year forever (g = ?5%). If the company is in equilibrium and its expected and required rate of return is 15%, which of the following statements is CORRECT?
The constant growth model cannot be used because the growth rate is negative.
The company's dividend yield 5 years from now is expected to be 10%.
The company's expected stock price at the beginning of next year is $9.50.
The company's expected capital gains yield is 5%.
The company's current stock price is $20.
1 points 
Question 2 
1. Which is the best measure of risk for a single asset held in isolation, and which is the best measure for an asset held in a diversified portfolio?
Beta; beta.
Variance; correlation coefficient.
Beta; variance.
Coefficient of variation; beta.
Standard deviation; correlation coefficient.
1 points 
Question 3 
1. Assume a project has normal cash flows. All else equal, which of the following statements is CORRECT?
A project's NPV increases as the WACC declines.
A project's discounted payback increases as the WACC declines.
A project's MIRR is unaffected by changes in the WACC.
A project's IRR increases as the WACC declines.
A project's regular payback increases as the WACC declines.
1 points 
Question 4 
1. Which of the following risk types can be diversified by adding stocks to a portfolio?
Systematic Risk.
Default risk.
Non diversifiable risks.
Unique risks.
Market Risk.
1 points 
Question 5 
1. Firms that make investment decisions based upon the payback rule may be biased towards rejecting projects:
with early cash inflows.
With short lives.
With long lives.
Those with negative NPVs.
None of above.
1 points 
Question 6 
1. When a project's internal rate of return equals its opportunity cost of capital, then:
The net present value will be negative.
The net present value is a linear combination of MIRR and IRR.
The net present value will be positive.
The project has no cash inflows.
The net present value will be zero.
1 points 
Question 7 
1. When hard rationing exists, projects may be evaluated by the use of ?
Payback period.
borrowing rather than lending projects.
Modified payback period.
A profitability index.
MIRR.
1 points 
Question 8 
1. Because of its age, your car costs $3000 annually in maintenence expense. You could replace it with a newer vehicle costing $6000. Both vehicles would be expected to last 4 more years. If your opportunity cost is 10% what should be the maximum annual maintenance expense be on the newer vehicle to justify the purchase ? (Hint : EAC on the new vehicle should not exceed $3000)
$1250.34.
$1107.18.
$1893.88.
$3000.00.
$1415.51.
1 points 
Question 9 
1. Taggart Inc.'s stock has a 50% chance of producing a 39% return, a 30% chance of producing a 10% return, and a 20% chance of producing a -28% return. What is the firm's expected rate of return?
16.90%
15.55%
16.22%
16.06%
18.42%
1 points 
Question 10 
1. Tom O'Brien has a 2-stock portfolio with a total value of $100,000. $55,000 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42. What is his portfolio's beta?
1.18
0.79
1.05
1.31
0.99
1 points 
Question 11 
1. Assume that you hold a well-diversified portfolio that has an expected return of 11.0% and a beta of 1.20. You are in the process of buying 1,000 shares of Alpha Corp at $10 a share and adding it to your portfolio. Alpha has an expected return of 22.5% and a beta of 1.80. The total value of your current portfolio is $90,000. What will the expected return and beta on the portfolio be after the purchase of the Alpha stock?
14.82% and 1.25
12.15% and 1.26
13.49% and 1.11
11.18% and 1.06
10.69% and 1.03
1 points 
Question 12 
1. Cooley Company's stock has a beta of 1.60, the risk-free rate is 2.25%, and the market risk premium is 5.50%. What is the firm's required rate of return?
9.83%
10.39%
11.05%
9.28%
13.81%
1 points 
Question 13 
1. Roenfeld Corp believes the following probability distribution exists for its stock. What is the coefficient of variation on the company's stock? 
State of the Economy Probability of State Occurring Stock's Expected Return
Boom 0.11 25%
Normal 0.50 15%
Recession 0.39 5%
2. 
0.6121
0.3992
0.6653
0.5322x
0.6387
1 points 
Question 14 
1. You hold a diversified $100,000 portfolio consisting of 20 stocks with $5,000 invested in each. The portfolio's beta is 1.12. You plan to sell a stock with b = 0.90 and use the proceeds to buy a new stock with b = 1.25. What will the portfolio's new beta be?
0.978
1.160
1.172
1.138
1.194
1 points 
Question 15 
1. Returns for the Dayton Company over the last 3 years are shown below. What's the standard deviation of the firm's returns? (Hint: This is a sample, not a complete population, so the sample standard deviation formula should be used.)
Year Return
2011 21.00%
2010 -12.50%
2009 15.00%
2. 
14.47%
15.54%
17.15%
20.36%
17.86%
1 points 
Question 16 
1. A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is r = 10.5%, and the expected constant growth rate is g = 2.8%. What is the stock's current price?
$11.20
$11.88
$11.10
$12.08
$9.74
1 points 
Question 17 
1. If D = $2.25, g (which is constant) = 3.5%, and P = $40, what is the stock's expected dividend yield for the coming year?
6.81%
5.82%
5.53%
5.47%
5.59%
1 points 
Question 18 
1. Bay Manufacturing is expected to pay a dividend of $1.25 per share at the end of the year (D = $1.25). The stock sells for $34.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?
5.78%
8.39%
7.08%
6.88%
8.46%
1 points 
Question 19 
1. Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend of $8.00 per share. If the required return on this preferred stock is 6.5%, at what price should the stock sell?
$123.08
$99.69
$121.85
$148.92
$100.92
1 points 
Question 20 
1. The Francis Company is expected to pay a dividend of D = $1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. The company's beta is 1.35, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is the company's current stock price?
$18.20
$28.80
$19.82
$20.97
$23.04
1 points 
Question 21 
1. Nachman Industries just paid a dividend of D0 = $2.75. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock's current market value?
$93.47
$78.52
$108.43
$111.23
$97.21
1 points 
Question 22 
1. A company's perpetual preferred stock currently sells for $125.00 per share, and it pays an $8.00 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the issue price. What is the firm's cost of preferred stock?
5.12%
5.46%
7.28%
6.74%
7.61%
1 points 
Question 23 
1. You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 16.50%. The firm will not be issuing any new stock. What is its WACC?
8.87%
12.15%
13.25%
8.32%
10.95%
1 points 
Question 24 
1. Anderson Systems is considering a project that has the following ca
sh flow and WACC data. What is the project's NPV? Note that if a project's projected NPV is negative, it should be rejected. 
WACC: 11.75% 
Year 0 1 2 3
Cash flows -$1,000 $500 $500 $500
2. 
$206.09
$216.40
$179.30
$199.91
$204.03
1 points 
Question 25 
1. Daves Inc. recently hired you as a consultant to estimate the company's WACC. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,125.00. (2) The company's tax rate is 40%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20. (4) The target capital structure consists of 35% debt and the balance is common equity. The firm uses the CAPM to estimate the cost of equity, and it does not expect to issue any new common stock. What is its WACC?
9.60%
10.21%
7.35%
8.65%
8.30%
1 points 
Question 26 
1. Warr Company is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected. 
Year 0 1 2 3 4
Cash flows -$825 $400 $400 $400 $400
2. 
35.95%
32.98%
39.91%
24.74%
28.69%
1 points 
Question 27 
1. Taggart Inc. is considering a project that has the following cash flow data. What is the project's payback? 
Year 0 1 2 3
Cash flows -$1,300 $500 $500 $500
2. 
2.60 years
1.98 years
2.76 years
3.09 years
2.73years
1 points 
Question 28 
1. Ehrmann Data Systems is considering a project that has the following cash flow and WACC data. What is the project's MIRR? Note that a project's projected MIRR can be less than the WACC (and even negative), in which case it will be rejected. 
WACC: 13.50% 
Year 0 1 2 3
Cash flows -$1,000 $450 $450 $450
2. 
15.65%
12.08%
17.35%
16.89%
15.49%
1 points 
Question 29 
1. Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? 
WACC: 10.00% 
Year 0 1 2 3
Cash flows -$625 $500 $500 $500
2. 
1.30years
1.41 years
1.58years
1.09years
1.07years
1 points 
Question 30 
1. Francis Inc.'s stock has a required rate of return of 10.25%, and it sells for $70.00 per share. The dividend is expected to grow at a constant rate of 6.00% per year. What is the expected year-end dividend, D ?
$3.12
$2.98
$2.23
$3.42
$2.83
 
	

business managment data bank

Question
	
51. What’s the present value of $4,500 discounted back 5 years
if the appropriate interest rate is 4.5%, compounded semiannually?



a. $3,089

b. $3,251

c. $3,422

d. $3,602

e. $3,782

 





52. What’s the future value of $1,200 after 5 years if the
appropriate interest rate is 6%, compounded monthly?



a. $1,537.69

b. $1,618.62

c. $1,699.55

d. $1,784.53

e. $1,873.76

 

53. What’s the present value of $1,525 discounted back 5 years
if the appropriate interest rate is 6%, compounded monthly?



a. $969

b. $1,020

c. $1,074

d. $1,131

e. $1,187

 

54. Master Card and other credit card issuers must by law print
the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 18.00%, with
interest paid monthly, what is the card's EFF%?



a. 18.58%

b. 19.56%

c. 20.54%

d. 21.57%

e. 22.65%

 



55. Riverside Bank offers to lend you $50,000 at a nominal rate
of 6.5%, compounded monthly. The loan
(principal plus interest) must be repaid at the end of the year. Midwest Bank also offers to lend you the
$50,000, but it will charge an annual rate of 7.0%, with no interest due until
the end of the year. How much higher or
lower is the effective annual rate charged by Midwest versus the rate charged
by Riverside?



a. 0.52%

b. 0.44%

c. 0.36%

d. 0.30%

e. 0.24%

 



56. Suppose Community Bank offers to lend you $10,000 for one
year at a nominal annual rate of 8.00%, but you must make interest payments at
the end of each quarter and then pay off the $10,000 principal amount at
the end of the year. What is the
effective annual rate on the loan?



a. 8.24%

b. 8.45%

c. 8.66%

d. 8.88%

e. 9.10%

 





57. Suppose a bank offers to lend you $10,000 for 1 year on a
loan contract that calls for you to make interest payments of $250.00 at the
end of each quarter and then pay off the principal amount at the end of
the year. What is the effective annual
rate on the loan?



a. 8.46%

b. 8.90%

c. 9.37%

d. 9.86%

e. 10.38%

 



58. Charter Bank pays a 4.50% nominal rate on deposits, with monthly
compounding. What effective annual rate
(EFF%) does the bank pay?



a. 3.72%

b. 4.13%

c. 4.59%

d. 5.05%

e. 5.56%

 

59. Suppose your credit card issuer states that it charges a
15.00% nominal annual rate, but you must make monthly payments, which amounts
to monthly compounding. What is the effective annual rate?



a. 15.27%

b. 16.08%

c. 16.88%

d. 17.72%

e. 18.61%

 

60. Pace Co. borrowed $20,000 at a rate of
7.25%, simple interest, with interest paid at the end of each
month. The bank uses a 360-day
year. How much interest would Pace have
to pay in a 30-day month?



a. $120.83

b. $126.88

c. $133.22

d. $139.88

e. $146.87

 
	

ECO 203 Week 5 Final Paper Expansionary Economic Policy

Question


ECO 203 Week 5 Final Paper
Expansionary Economic Policy

In an
effort to move the economy out of a recession, the federal government would
engage in expansionary economic policies. Describe the actions the
government would take in conducting expansionary fiscal policy and expansionary
monetary policy.

Expansionary
Fiscal Policy:

Review Chapter 7: Classical
Macroeconomics and the Keynesian Challenge and Chapter
9: Taxes, Government
Spending, and Fiscal Policy.

Explain
the actions the federal government would take while engaging in expansionary
fiscal policy in terms of the following:

The
necessary change in taxes and government spending, The effect on aggregate
demand, GDP, and employment.

Final
Paper

Expansionary
Monetary Policy: 

Review Chapter 12: Banking
and The Federal Reserve System and Chapter 14: Monetary Policy In Theory And
Practice.

Identify
the three tools available to the Federal Reserve Bank (The Fed) when conducting
monetary policy. Explain whether the Fed would:

Increase
or decrease the required reserve ratio Increase or decrease the discount rate
Buy or sell government securities when conducting expansionary monetary policy

Explain
how these actions would affect the money supply, interest rates, spending,
aggregate demand, GDP, and employment. 



Writing
the Final Paper



The Final Paper:

1. Must
be 5 to 6 double-spaced pages in length and formatted according to APA style as
outlined in your approved style guide. 

2. Must have a cover page that includes:

a. Title
of paper 

b. Student’s name 

c. Course name and number 

d. Instructor’s name 

e. Date submitted

3. Must
include an introductory paragraph with a succinct thesis statement. 

4. Must address the topic of the paper with critical thought. 

5. Must conclude with a restatement of the thesis and a conclusion paragraph. 

6. Must use at least four scholarly resources, including the textbook. Two references
must come from the Ashford Library.

7. Must use APA style as outlined in your approved style guide to document
all sources. 

8. Must include, on the final page, a Reference List that is completed
according to APA style as outlined in your approved style guide.





	

Finance!!!!!!!!!!!!

Question
	ntroduction

You will assume that you still work as a financial analyst for AirJet Best Parts, Inc. The company is considering a capital investment in a new machine and you are in charge of making a recommendation on the purchase based on (1) a given rate of return of 15% (Task 4) and (2) the firm’s cost of capital (Task 5).

Task 4. Capital Budgeting for a New Machine

A few months have now passed and AirJet Best Parts, Inc. is considering the purchase on a new machine that will increase the production of a special component significantly. The anticipated cash flows for the project are as follows:

Year 1	 $1,100,000

Year 2	 $1,450,000

Year 3	 $1,300,000

Year 4	 $950,000

You have now been tasked with providing a recommendation for the project based on the results of a Net Present Value Analysis. Assuming that the required rate of return is 15% and the initial cost of the machine is $3,000,000.

•	What is the project’s IRR? (10 pts)?

•	What is the project’s NPV? (15 pts) ?

•	Should the company accept this project and why (or why not)? (5 pts) ?

•	Explain how depreciation will affect the present value of the project. (10 pts) ?

•	Provide examples of at least one of the following as it relates to the project: (5 pts each)

•	Sunk Cost

•	Opportunity cost

•	Erosion ?

•	Explain how you would conduct a scenario and sensitivity analysis of the project. What would be some project-specific risks and market risks related to this project? (20 pts)

Task 5: Cost of Capital

AirJet Best Parts Inc. is now considering that the appropriate discount rate for the new machine should be the cost of capital and would like to determine it. You will assist in the process of obtaining this rate.

•	Compute the cost of debt. Assume AirJet Best Parts Inc. is considering issuing new bonds. Select current bonds from one of the main competitors as a benchmark. Key competitors include Raytheon, Boeing, Lockheed Martin, and the Northrop Grumman Corporation. ?

•	What is the YTM of the competitor’s bond? You may use a number of sources, but we recommend Morningstar. Find the YTM of one 15 or 20 year bond with the highest possible creditworthiness. You may assume that new bonds issued by AirJet Best Parts, Inc. are of similar risk and will require the same return. (5 pts) ?

•	What is the after-tax cost of debt if the tax rate is 34%? (5 pts) ?

•	Explain what other methods you could have used to find the cost of debt for AirJet Best Parts Inc.(10 pts) ?

•	Explain why you should use the YTM and not the coupon rate as the required return for debt. (5 pts) ?

•	Compute the cost of common equity using the CAPM model. For beta, use the average beta of three selected competitors. You may obtain the betas from Yahoo Finance. Assume the risk free rate to be 3% and the market risk premium to be 4%. ?

•	What is the cost of common equity? (5 pts) ?

•	Explain the advantages and disadvantages to use the CAPM model as the method to compute the cost of common equity. Compare and contrast this method with the dividend growth model approach. (10 pts) ?

•	Compute the cost of preferred equity assuming the dividend paid for preferred stock is $2.93 and the current value of the stock is $50 per share.?

•	What is the cost of preferred equity? (5 pts) ?

•	Is there any other method to compute this cost? Explain. (5 pts) ?

•	Assuming that the market value weights of these capital sources are 30% bonds, 60% common equity and 10% preferred equity, what is the weighted cost of capital of the firm? (10 pts) ?

•	Should the firm use this WACC for all projects? Explain and provide examples as appropriate. (10 pts)?

•	Recompute the net present value of the project based on the cost of capital you found. Do you still believe that your earlier recommendation for accepting or rejecting the project was adequate? Why or why not? (5 pts)	

Fed Tax Quiz and Short Answers

Question
	
(TCOs 1 and 8) Sarah and Emily form Red Corporation with the following investments: Sarah transfers computers worth $200,000 (basis of $80,000), and Emily transfers real estate worth $180,000 (basis of $40,000) and services (worth $20,000) rendered in organizing the corporation. Each is issued 600 shares in Red Corporation. With respect to the transfers, (Points : 5) 
Sarah has no recognized gain; Emily recognizes income/gain of $160,000.
Neither Sarah nor Emily recognizes gain or income.
Red Corporation has a basis of $60,000 in the real estate.
Emily has a basis of $60,000 in the shares of Red Corporation.
None of the above

Question 2. 2. (TCOs 1 and 8) Hunter and Warren form Tan Corporation. Hunter transfers equipment (basis of $210,000 and fair market value of $180,000), and Warren transfers land (basis of $15,000 and fair market value of $150,000) and $30,000 of cash. Each receives 50% of Tan's stock. As a result of these transfers, (Points : 5) 
Hunter has a recognized loss of $30,000; Warren has a recognized gain of $135,000.
Neither Hunter nor Warren has any recognized gain or loss.
Hunter has no recognized loss; Warren has a recognized gain of $30,000.
Tan Corporation has a basis in the land of $45,000.
None of the above

Question 3. 3. (TCOs 1, 8, and 9) Eagle Corporation owns stock in Hawk Corporation and has taxable income of $160,000 for the year before considering the dividends received deduction. Hawk Corporation pays Eagle a dividend of $200,000, which was considered in calculating the $160,000. What amount of dividends received deduction may Eagle claim if it owns 15% of Hawk's stock? (Points : 5) 
$0
$112,000
$140,000
$160,000
None of the above

Question 4. 4. (TCOs 1 and 8) Emerald Corporation, a calendar year C corporation, was formed and began operations on July 1, 2010. The following expenses were incurred during the first tax year (July 1 through December 31, 2010) of operations:
Expenses of temporary directors and of organizational meetings $9,000
Fee paid to the state of incorporation $1,000
Accounting services incident to organization $2,500
Legal services for drafting the corporate charter and bylaws $3,500
Expenses incident to the printing and sale of stock certificates $4,000

Assuming a § 248 election, what is the Emerald's deduction for organizational expenditures for 2010? (Points : 5) 
$0
$533
$5,367
$5,500
None of the above

Question 5. 5. (TCOs 1 and 9) Beige Corporation (a calendar year taxpayer) has taxable income of $150,000, and its financial records reflect the following for the year. 
Federal income taxes paid $75,000
Net operating loss carry forward deducted currently $35,000
Gain recognized this year on an installment sale from a prior year $22,000
Depreciation deducted on tax return (ADS depreciation would have been $5,000) $20,000
Interest income on Iowa state bonds $4,000

What is Beige Corporation's current E & P? (Points : 5) 
$68,000
$77,000
$103,000
$107,000
None of the above

Question 6. 6. (TCOs 1 and 9) Stacey and Andrew each own one half of the stock in Parakeet Corporation, a calendar year taxpayer. Cash distributions from Parakeet are $350,000 to Stacey on April 1 and $150,000 to Andrew on May 1. If Parakeet's current E & P is $60,000, how much is allocated to Andrew's distribution? (Points : 5) 
$5,000
$10,000
$18,000
$30,000
None of the above

Question 7. 7. (TCOs 1 and 10) Which, if any, of the following can be eligible shareholders of an S corporation? (Points : 5) 
A resident alien
Partnership
A foreign corporation
A nonqualifying trust
None of the above

Question 8. 8. (TCOs 1 and 10) Samantha owned 1,000 shares in Evita, Inc. an S corporation, that uses the calendar year. On October 11, 2010, Samantha sells all of her Evita stock. Her basis at the beginning of 2010 was $60,000. Her share of the corporate income for 2010 was $22,000, and she receives a distribution of $37,000 between January 1 and October 11, 2010. What is her basis at the time of the sale? (Points : 5) 
$45,000
$60,000
$75,000
$82,000

Question 9. 9. (TCOs 1 and 10) On January 1, 2010, Kinney, Inc. an electing S corporation, has $4,000 of AEP and a balance of $10,000 in AAA. Kinney has two shareholders, Erin and Maine, each of whom owns 500 shares of Kinney's stock. Kinney's 2010 taxable income is $5,000. Kinney distributes $6,000 to each shareholder on February 1, 2010, and distributes another $3,000 to each shareholder on September 1. How is Erin taxed on this distribution? (Points : 5) 
$500 dividend income
$1,000 dividend income
$1,500 dividend income
$3,000 dividend income
None of the above

Question 10. 10. (TCOs 1 and 10) Lott Corporation in Macon, Georgia, converts to S corporation status in 2010. Lott used the LIFO inventory method in 2009 and had a LIFO inventory of $420,000 (FIFO value of $550,000). How much tax must be added to the 2009 corporate tax liability, assuming that Lott is subject to a 35% tax rate? (Points : 5) 
$0
$11,375
$45,500
$130,000
None of the above
(TCOs 1 and 8) Sarah and Emily form Red Corporation with the following investments: Sarah transfers computers worth $200,000 (basis of $80,000), and Emily transfers real estate worth $180,000 (basis of $40,000) and services (worth $20,000) rendered in organizing the corporation. Each is issued 600 shares in Red Corporation. With respect to the transfers, (Points : 5) 
Sarah has no recognized gain; Emily recognizes income/gain of $160,000.
Neither Sarah nor Emily recognizes gain or income.
Red Corporation has a basis of $60,000 in the real estate.
Emily has a basis of $60,000 in the shares of Red Corporation.
None of the above

Question 2. 2. (TCOs 1 and 8) Hunter and Warren form Tan Corporation. Hunter transfers equipment (basis of $210,000 and fair market value of $180,000), and Warren transfers land (basis of $15,000 and fair market value of $150,000) and $30,000 of cash. Each receives 50% of Tan's stock. As a result of these transfers, (Points : 5) 
Hunter has a recognized loss of $30,000; Warren has a recognized gain of $135,000.
Neither Hunter nor Warren has any recognized gain or loss.
Hunter has no recognized loss; Warren has a recognized gain of $30,000.
Tan Corporation has a basis in the land of $45,000.
None of the above

Question 3. 3. (TCOs 1, 8, and 9) Eagle Corporation owns stock in Hawk Corporation and has taxable income of $160,000 for the year before considering the dividends received deduction. Hawk Corporation pays Eagle a dividend of $200,000, which was considered in calculating the $160,000. What amount of dividends received deduction may Eagle claim if it owns 15% of Hawk's stock? (Points : 5) 
$0
$112,000
$140,000
$160,000
None of the above

Question 4. 4. (TCOs 1 and 8) Emerald Corporation, a calendar year C corporation, was formed and began operations on July 1, 2010. The following expenses were incurred during the first tax year (July 1 through December 31, 2010) of operations:
Expenses of temporary directors and of organizational meetings $9,000
Fee paid to the state of incorporation $1,000
Accounting services incident to organization $2,500
Legal services for drafting the corporate charter and bylaws $3,500
Expenses incident to the printing and sale of stock certificates $4,000

Assuming a § 248 election, what is the Emerald's deduction for organizational expenditures for 2010? (Points : 5) 
$0
$533
$5,367
$5,500
None of the above

Question 5. 5. (TCOs 1 and 9) Beige Corporation (a calendar year taxpayer) has taxable income of $150,000, and its financial records reflect the following for the year. 
Federal income taxes paid $75,000
Net operating loss carry forward deducted currently $35,000
Gain recognized this year on an installment sale from a prior year $22,000
Depreciation deducted on tax return (ADS depreciation would have been $5,000) $20,000
Interest income on Iowa state bonds $4,000

What is Beige Corporation's current E & P? (Points : 5) 
$68,000
$77,000
$103,000
$107,000
None of the above

Question 6. 6. (TCOs 1 and 9) Stacey and Andrew each own one half of the stock in Parakeet Corporation, a calendar year taxpayer. Cash distributions from Parakeet are $350,000 to Stacey on April 1 and $150,000 to Andrew on May 1. If Parakeet's current E & P is $60,000, how much is allocated to Andrew's distribution? (Points : 5) 
$5,000
$10,000
$18,000
$30,000
None of the above

Question 7. 7. (TCOs 1 and 10) Which, if any, of the following can be eligible shareholders of an S corporation? (Points : 5) 
A resident alien
Partnership
A foreign corporation
A nonqualifying trust
None of the above

Question 8. 8. (TCOs 1 and 10) Samantha owned 1,000 shares in Evita, Inc. an S corporation, that uses the calendar year. On October 11, 2010, Samantha sells all of her Evita stock. Her basis at the beginning of 2010 was $60,000. Her share of the corporate income for 2010 was $22,000, and she receives a distribution of $37,000 between January 1 and October 11, 2010. What is her basis at the time of the sale? (Points : 5) 
$45,000
$60,000
$75,000
$82,000

Question 9. 9. (TCOs 1 and 10) On January 1, 2010, Kinney, Inc. an electing S corporation, has $4,000 of AEP and a balance of $10,000 in AAA. Kinney has two shareholders, Erin and Maine, each of whom owns 500 shares of Kinney's stock. Kinney's 2010 taxable income is $5,000. Kinney distributes $6,000 to each shareholder on February 1, 2010, and distributes another $3,000 to each shareholder on September 1. How is Erin taxed on this distribution? (Points : 5) 
$500 dividend income
$1,000 dividend income
$1,500 dividend income
$3,000 dividend income
None of the above

Question 10. 10. (TCOs 1 and 10) Lott Corporation in Macon, Georgia, converts to S corporation status in 2010. Lott used the LIFO inventory method in 2009 and had a LIFO inventory of $420,000 (FIFO value of $550,000). How much tax must be added to the 2009 corporate tax liability, assuming that Lott is subject to a 35% tax rate? (Points : 5) 
$0
$11,375
$45,500
$130,000
None of the above
1. You’re probably of the opinion that the distinction between separately stated and non-separately stated income is one of the most confusing concepts that you’ve encountered this week. For Congress to come up with something this confusing, you know it must have had a good reason (or at least we'd like to think so!). Think about the concept for a moment. What is the broad tax policy behind separating these two categories of income? What is Congress trying to achieve? What problems does it prevent? What problems does it cause?

2. In enacting Subchapter S of the Code, Congress decided to give a certain group of corporations a break from the burden of double taxation. Given this fact, there MUST be limitations on the corporations that can select S corporation status! Provide an example of one such limitation, including the text of the Code section that provides the limitation