Spring 2012 Finance 3130 1. Sample Exam 1A Questions for Review The form of organization for a business is an important issue‚ as this decision has very significant effect on the income and wealth of the firm ’s owners. a. b. True False 2. There are three primary disadvantages of a regular partnership: (1) unlimited liability‚ (2) limited life of the organization‚ and (3) difficulty of transferring ownership. These combine to make it difficult for partnerships to attract large amounts of
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year‚ and $10‚000 at the end of the prior year. The interest expense on the income statement for the year is $1‚560. This one is kind of tricky – you have to pay interest on loans there is really no way around it. You could either pay off the loan with the money that is in savings – this would save you a ton on interest – or you could try to find another bank with a lower interest rate for this. Because this is a non-profit organization paying interest on a loan is really unrealistic – If I were in control
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Chapter 15: Financial Instruments: Complex Debt and Equity Case 15-1 Zebo Limited 15-2 On-the-Crest Ltd. 15-3 Techno Wizard Ltd. Suggested Time Technical Review TR15-1 Convertible Debt‚ Investor’s Option 10 TR15-2 Convertible Debt‚ Mandatory Conversion 10 TR15-3 Options and Warrants 10 TR15-4 Share-Based Compensation; Equity-Settled 10 TR15-5 Share-Based
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instrument with no ready market is exchanged for property whose fair market value is currently indeterminable. When such a transaction takes place‚ (Points : 5) the present value of the debt instrument must be approximated using an imputed interest rate. it should not be recorded on the books of either party until the fair market value of the property becomes evident. the board of directors of the entity receiving the property should estimate a value for the property that will
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of money is positive. Question 2 (5 points) At an interest rate of 10% it is better to have $100 today than $120 in 2 years. Your Answer Score Explanation True Correct 5.00 Correct; it is compounding! False Total 5.00 / 5.00 Question Explanation All about compounding! Question 3 (5 points) Shawn wants to buy a new telescope. He estimates that it will take him one year to save the money and that the telescope will cost $200. At an interest rate of 6%‚ how much does Shawn need to set aside today
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question‚ we should find the PV of both options‚ and compare them. Since we are purchasing the car‚ the lowest PV is the best option. The PV of the leasing is simply the PV of the lease payments‚ plus the $99. The interest rate we would use for the leasing option is the same as the interest rate of the loan. The PV of leasing is: Enter | 36 | 7/12=.5833 | | -$450 | 0 | | | N | | | I/Y | | | PV | | | PMT | | | FV | | Solve for | | | $14‚573.91 | | | PV = $99 + $450{1
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SEO: Debt Collection | Trustify.info Metadescription: Are you having some difficulties collecting debt? Have your debtor absconded after failing to repay his loan? Trustify will assist you identify how to collect the money owed to you in a more convenient way. Headline: Make Debt Collection Easier and Hassle-Free Sub-headline: Locate a Debtor and Know his Current Address Debts or credits are very useful when acquiring a new house‚ investing in education‚ or starting a new business. Banks‚ lenders
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Money Project Show all your work! Name _________________ 1. If Mrs. Beach wanted to invest a lump sum of money today to have $100‚000 when she retired at 65 (she is 40 years old today) how much of a deposit would she have to make if the interest rate on the C.D. was 5%? a. What would Mrs. Beach have to deposit if she were to use high quality corporate bonds an earned an average rate of return of 7%. b. What would Mrs. Beach have to deposit if she were to use common
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to real estate agency 9‚000 (j) Installation of fences around property 4‚000 (k) Cost of razing and removing building 11‚000 (l) Proceeds from salvage of demolished building (5‚000) (m) Interest paid during construction on money borrowed for construction 13‚000 (n) Cost of parking lots and driveways 19‚000 (o) Cost of trees and shrubbery planted (permanent in nature) 14‚000 (p) Excavation
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or the general level of interest rates‚ in the economy? The four most fundamental factors that affect the cost of money are: production opportunities‚ time of consumption‚ risk and inflation. The interest rate given to savers is based on: the rate of return on invested capital‚ savers time preferences for current versus future consumption‚ the riskiness of the loan‚ the expected future rate of inflation. High inflation and high risk will result in high interest rates. b. What is the
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