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Question
Renee invested $2,000 six years ago at 4.5 percent interest. She spends all of her interest earnings immediately so she only receives interest on her initial $2,000 investment. Which type of interest is she earning?
A) Free interest
B) Complex interest
C) Simple interest
D) Interest on interest
E) Compound interest
Answer
This answer is hidden. It contains 1 characters.
Related questions
Q:
Hayes Bakery has sales of $30,600, costs of $15,350, an addition to retained earnings of $4,221, dividends paid of $469, interest expense of $1,300, and a tax rate of 21 percent. What is the amount of the depreciation expense?
A) $4,820.13
B) $5,500.89
C) $8,013.29
D) $8,180.01
E) $9,500.00
Q:
Jensen Enterprises paid $700 in dividends and $320 in interest this past year. Common stock remained constant at $6,800 and retained earnings decreased by $180. What is the net income for the year?
A) $180
B) $520
C) $1,020
D) $880
E) $1,200
Q:
On the statement of cash flows, which one of the following is considered a financing activity?
A) Increase in inventory
B) Decrease in accounts payable
C) Increase in net working capital
D) Dividends paid
E) Decrease in fixed assets
Q:
Best-Ever Chicken has a debt-equity ratio of .94. Return on assets is 8.5 percent, and total equity is $520,000. What is the net income?
A) $44,200
B) $88,880
C) $85,748
D) $41,548
E) $74,909
Q:
Lancaster Toys has a profit margin of 5.1 percent, a total asset turnover of 1.84, and a return on equity of 16.2 percent. What is the debt-equity ratio?
A) .73
B) .42
C) .81
D) .64
E) .83
Q:
During the year, RIT Corp. had sales of $565,600. Costs of goods sold, administrative and selling expenses, and depreciation expenses were $476,000, $58,800, and $42,800, respectively. In addition, the company had an interest expense of $112,000 and a tax rate of 22 percent. What is the operating cash flow for the year? Ignore any tax loss carry-forward provisions.
A) $17,920
B) $21,840
C) $30,800
D) $52,600
E) $77,840
Q:
The Beach Shoppe has beginning total debt of $682,400 and ending total debt of $697,413. Current liabilities increased by $18,915 during the year. What was the cash flow to creditors if the firm paid $34,215 in interest during the year?
A) $384
B) $287
C) $38,117
D) $20,228
E) $19,202
Q:
Global Tours has beginning current assets of $1,360, beginning current liabilities of $940, ending current assets of $1,720, and ending current liabilities of $1,080. What is the change in net working capital?
A) $220
B) $170
C) $190
D) $940
E) $1,060
Q:
Webster's has beginning net fixed assets of $684,218, ending net fixed assets of $679,426, and depreciation expense of $48,859. What is the net capital spending for the year if the tax rate is 25 percent?
A) $42,920
B) $53,651
C) $44,067
D) $35,255
E) $48,600
Q:
BK Enterprises neither sold nor repurchased any shares of stock during the year. The firm had annual sales of $7,202, depreciation of $1,196, cost of goods sold of $4,509, interest expense of $318, taxes of $248, beginning-of-year shareholders' equity of $4,808, and end-of-year shareholders' equity of $4,922. What is the amount of dividends paid during the year?
A) $817
B) $1,009
C) $864
D) $709
E) $515
Q:
JJ Enterprises has current assets of $10,406, long-term debt of $4,780, and current liabilities of $9,822 at the beginning of the year. At year end, current assets are $11,318, long-term debt is $5,010, and current liabilities are $9,741. The firm paid $277 in interest and $320 in dividends during the year. What is the cash flow to creditors for the year?
A) −$47
B) −$507
C) −$97
D) $47
E) $507
Q:
At the beginning of the year, Trees Galore had current liabilities of $15,932 and total debt of $68,847. By year end, current liabilities were $13,870 and total debt was $72,415. What is the amount of net new borrowing for the year?
A) $5,630
B) −$2,480
C) $3,568
D) $4,677
E) −$2,062
Q:
Beach Front Industries has sales of $546,000, costs of $295,000, depreciation expense of $37,000, interest expense of $15,000, and a tax rate of 21 percent. The firm paid $59,000 in cash dividends. What is the addition to retained earnings?
A) $98,210
B) $81,700
C) $95,200
D) $103,460
E) $121,680
Q:
Bonner Automotive has shareholders' equity of $218,700. The firm owes a total of $141,000 of which 40 percent is payable within the next year. The firm has net fixed assets of $209,800. What is the amount of the net working capital?
A) $149,900
B) $93,500
C) $125,600
D) −$47,500
E) $56,500
Q:
A firm has common stock of $6,200, paid-in surplus of $9,100, total liabilities of $8,400, current assets of $5,900, and fixed assets of $21,200. What is the amount of the shareholders' equity?
A) $6,900
B) $15,300
C) $18,700
D) $23,700
E) $35,500
Q:
Depreciation for a tax-paying firm:
A) increases expenses and lowers taxes.
B) increases the net fixed assets as shown on the balance sheet.
C) reduces both the net fixed assets and the costs of a firm.
D) is a noncash expense that increases the net income.
E) decreases net fixed assets, net income, and operating cash flows.
Q:
Which one of these sets forth the common set of standards and procedures by which audited financial statements are prepared?
A) Matching principle
B) Cash flow identity
C) Generally Accepted Accounting Principles
D) Financial Accounting Reporting Principles
E) Standard Accounting Value Guidelines
Q:
Net working capital is defined as:
A) total liabilities minus shareholders' equity.
B) current liabilities minus shareholders' equity.
C) fixed assets minus long-term liabilities.
D) total assets minus total liabilities.
E) current assets minus current liabilities.
Q:
You recently purchased a grocery store. At the time of the purchase, the store's market value and its book value were equal. The purchase included the building, fixtures, and inventory. Which one of the following is most apt to cause the market value of this store to be less than its book value?
A) A sudden and unexpected increase in inflation
B) The replacement of old inventory items with more desirable products
C) Improvements to the surrounding area by other store owners
D) Construction of a new restricted access highway located between the store and the surrounding residential areas
E) Addition of a stop light at the main entrance to the store's parking lot
Q:
Which one of the following statements is correct concerning the NYSE?
A) The publicly traded shares of a NYSE-listed firm must be worth at least $250 million.
B) The NYSE is the largest dealer market for listed securities in the United States.
C) The listing requirements for the NYSE are more stringent than those of NASDAQ.
D) Any corporation desiring to be listed on the NYSE can do so for a fee.
E) The NYSE is an OTC market functioning as both a primary and a secondary market.
Q:
Which one of the following is a means by which shareholders can replace company management?
A) Stock options
B) Promotion
C) Sarbanes-Oxley Act
D) Agency play
E) Proxy fight
Q:
Agency problems are most associated with:
A) sole proprietorships.
B) general partnerships.
C) limited partnerships.
D) corporations.
E) limited liability companies.
Q:
The Sarbanes-Oxley Act of 2002 holds a public company's ________ responsible for the accuracy of the company's financial statements.
A) managers
B) internal auditors
C) external legal counsel
D) internal legal counsel
E) Securities and Exchange Commission agent
Q:
Decisions made by financial managers should primarily focus on increasing the:
A) size of the firm.
B) growth rate of the firm.
C) gross profit per unit produced.
D) market value per share of outstanding stock.
E) total sales.
Q:
A partnership with four general partners:
A) distributes profits based on percentage of ownership.
B) has an unlimited partnership life.
C) limits the active involvement in the firm to a single partner.
D) limits each partner's personal liability to 25 percent of the partnership's total debt.
E) must distribute 25 percent of the profits to each partner.
Q:
The primary advantage of being a limited partner is:
A) the receipt of tax-free income.
B) the partner's active participation in the firm's activities.
C) the lack of any potential financial loss.
D) the daily control over the business affairs of the partnership.
E) the partner's maximum loss is limited to their capital investment.
Q:
Which one of the following statements concerning a sole proprietorship is correct?
A) A sole proprietorship is designed to protect the personal assets of the owner.
B) The profits of a sole proprietorship are subject to double taxation.
C) The owner of a sole proprietorship is personally responsible for all of the company's debts.
D) There are very few sole proprietorships remaining in the U.S. today.
E) A sole proprietorship is structured the same as a limited liability company.
Q:
Which one of the following questions is least likely to be addressed by financial managers?
A) How should a product be marketed?
B) Should customers be given 30 or 45 days to pay for their credit purchases?
C) Should the firm borrow more money?
D) Should the firm acquire new equipment?
E) How much cash should the firm keep on hand?
Q:
An example of a capital budgeting decision is deciding:
A) how many shares of stock to issue.
B) whether or not to purchase a new machine for the production line.
C) how to refinance a debt issue that is maturing.
D) how much inventory to keep on hand.
E) how much money should be kept in the checking account.
Q:
The date on which a shareholder is officially listed as the recipient of stock rights is called the:
A) issue date.
B) offer date.
C) declaration date.
D) holder-of-record date.
E) ex-rights date.