Question Details

[answered] 1. Bank A pays 8.5 percent compounded monthly on all deposi


I have 50 mins to finish my finance exam. ?Please help!!!


1. Bank A pays 8.5 percent compounded monthly on all deposits. What is the

 

effective rate?

 

A 8.192

 

. %

 

B 8.839

 

. %

 

C 8.973

 

. %

 

D 8.436

 

. %

 

E. 8.322 % F. 8.031 % G 8.668

 

. %

 

H 9.089

 

. % 6 points QUESTION 2

 

1.

 

The Bank of Loans uses the following rating scheme to classify the riskiness of

 

its customers. Risk Class

 

Prime

 

High grade

 

Upper medium grade

 

Lower medium grade

 

Speculative: Non-investment

 

grade

 

Speculative: Highly

 

Substantial risks

 

Extremely speculative Risk Premium

 

(%)

 

.05

 

1.0

 

1.5

 

2.0

 

4.0

 

6.0

 

9.0

 

12.0 2.

 

The bank?s pure rate of interest is 4.0% and the inflation premium is

 

3%. What rate would the bank offer a customer who is in the lower medium

 

grade risk class?

 

A 10.31

 

. %

 

B 8.21

 

. %

 

C 8.74

 

. %

 

D 9.79

 

. %

 

E. 9.26 % F. 7.69 % G 6.64

 

. %

 

H 7.16

 

. % 6 points QUESTION 3

 

1.

 

You just won the lottery! You wish to put away enough money so that you can

 

withdraw $7,500 per month for 22 years. You can earn 10.5% rate on any funds you

 

deposit. How much will you have to deposit now to meet your goal? (Note:

 

Withdrawal frequency matches compounding frequency.)

 

A $536,7

 

. 73

 

B $653,1

 

. 43

 

C $594,5

 

. 51

 

D $712,1

 

. 79

 

E. $771,2 03 F. $829,6 59 G $480,1

 

. 00

 

H $886,8

 

. 90 6 points QUESTION 4

 

1.

 

Upon graduation from college in two years you plan to go for an extravagant

 

European vacation. Your parents will give you a graduation gift of $3,700 to help with

 

the cost of the vacation. You have $2,000 available at present, which you plan to

 

deposit into an account that pays 11.75 percent interest compounded daily. What is

 

the maximum amount you will be able to spend on your vacation?

 

A $5,8

 

. 85

 

B $5,4

 

. 37

 

C $6,2

 

. 30

 

D $6,1

 

. 09

 

E. $6,0 04

 

F. $5,5 53

 

G $5,7

 

. 77

 

H $5,6

 

. 61 6 points QUESTION 5

 

1.

 

Cash Coverage, Inc. had net sales of $700,000 last year, and increased its

 

retained earnings by $75,000 for the year after paying a dividend of $2 per share on

 

37,500 outstanding shares. The tax rate for the company is 40%. The company had

 

cost of goods sold of $275,000 and its accumulated depreciation increased by

 

$125,000. What is its cash coverage ratio?

 

A 5.4

 

. 5

 

B 3.7

 

. 1

 

C 4.6

 

. 7

 

D 8.5

 

. 0

 

E. 2.5 0

 

F. 6.0 0

 

G 3.0

 

. 0

 

H 4.3

 

. 1 6 points QUESTION 6

 

1.

 

You purchased a new car for $35,000 by making a $10,000 down payment and

 

borrowing the remainder at an annual rate of 9.25 percent for five years. What is

 

your monthly payment?

 

A $40

 

. 6

 

B $57

 

. 0

 

C $52

 

. 2

 

D $42

 

. 8

 

E. $45 1 F. $49 8 G $54

 

. 6

 

H $47

 

. 5 6 points QUESTION 7

 

1.

 

Fast Street Investment Company offers you an investment that promises to

 

triple your money in 57 months. Interest is compounded quarterly. What rate per

 

quarter is the investment promising?

 

A 13.0

 

. %

 

B 6.0%

 

.

 

C 6.7%

 

.

 

D 10.5

 

. %

 

E. 17.0 % F. 5.4%

 

G 7.6%

 

.

 

H 8.8%

 

. 6 points QUESTION 8

 

1.

 

UML Inc. had an EBIT of 67,000, depreciation expense of 8,500, and paid

 

18,000 in taxes. Its interest costs were $9,200; its long-term borrowing reduced by

 

$4,000; it raised $6,000 in new equity; and paid $12,000 in dividends. If the net

 

capital spending was $28,000, what was the change in net working capital?

 

A 10,3

 

. 00

 

B 10,6

 

. 00

 

C 10,0

 

. 00

 

D 11,5

 

. 00

 

E. 11,2 00 F. 9,70 0 G 9,40

 

. 0

 

H 10,9

 

. 00 6 points QUESTION 9

 

1.

 

ICC, Inc. (ICC) had sales of $300,000 on which it earned net income of

 

$24,000. Its total debt is $54,000 and total equity is $78,000. Last year, ICC paid

 

dividends of $6,000. If the total debt ratio remains constant and the company grows

 

at the sustainable growth rate in the coming year, how much new borrowing will take

 

place?

 

A $9,88

 

. 2

 

B $27,7

 

. 20

 

C $16,2

 

. 00

 

D $7,50

 

. 0

 

E. $20,3 57

 

F. $12,7 50

 

G $30,2

 

. 50

 

H $25,3

 

. 85 6 points QUESTION 10

 

1.

 

Lowell Growth, Inc. has total debt ratio of 0.48 and a dividend payout ratio of

 

40 percent. If its profit margin is 7 percent and total asset turnover is 2.5, what is its

 

return on assets ratio (ROA)?

 

A 40.0

 

. % B 20.6

 

. %

 

C 17.5

 

. %

 

D 35.6

 

. %

 

E. 27.6 % F. 24.0 % G 14.6

 

. %

 

H 31.5

 

. % 6 points QUESTION 11

 

1.

 

Breads ?R Us had sales of $60,000 last year. Their total costs were $22,000,

 

and the depreciation charge was $3,000. They have 1,680 shares outstanding and

 

paid dividend of $3.20 per share after keeping 70 percent of the net income as

 

retained earnings. If they paid 40 percent in taxes, how much was the interest

 

expense?

 

A 1,91

 

. 1

 

B 1,00

 

. 0

 

C 5,13

 

. 3

 

D 5,51

 

. 1

 

E. 4,66 7

 

F. 3,46 7

 

G 4,11

 

. 1

 

H 2,73 . 3 6 points QUESTION 12

 

1.

 

Note: This is a challenging question. Please attempt it in the end.

 

Ms. Ieda Silva plans to retire in 35 years and expects to live for 20 years

 

after retirement. She is preparing a savings plan to meet the following objectives.

 

First, after retirement she would like to be able to withdraw $20,000 per month. The

 

first withdrawal will occur at the end of the first month after retirement. Second, she

 

would like to leave her son an inheritance of $1,000,000 when she passes on. Finally,

 

she would like to set up a fund that will pay $5,000 per month forever to her favorite

 

charity after she passes on. These payments to the charity will start one month after

 

she passes on. All monies can earn 10 percent annual rate compounded monthly.

 

How much will she have to save per month to meet these objectives? She wishes to

 

make the first deposit a month from now and the last deposit on the day she retires.

 

A $1,105.

 

. 11

 

B $983.2

 

. 4

 

C $1,014.

 

. 02

 

D $430.7

 

. 1

 

E. $603.3 8 F. $1,550. 51 G $1,202.

 

. 17

 

H $1,306.

 

. 52 6 points QUESTION 13

 

1.

 

You are 20 years old and plan to retire with $1,000,000. You have $37,500

 

available for investment now. You deposit this into an account that pays 10.75%

 

interest compounded annually? How old will you be when the account has the target

 

amount? (Answers are rounded.)

 

A 6

 

. 1

 

B 6

 

. 5

 

C 5

 

. 4

 

D5

 

. 5

 

E. 5 2

 

F. 6 3

 

G5

 

. 9

 

H5

 

. 7 6 points QUESTION 14

 

1.

 

Riverhawk Sales, Inc. had a net income of $15,000 on sales of $100,000 last

 

year. Its balance sheet shows debt of $20,000 and equity of $60,000. If the total

 

dividend paid was $5,000, what is its sustainable growth rate?

 

A 0.14

 

. 78

 

B 0.13

 

. 33

 

C 0.20

 

. 00

 

D 0.12

 

. 00

 

E. 0.16 36 F. 0.09 63 G 0.10

 

. 77

 

H 0.18

 

. 10 6 points QUESTION 15

 

1.

 

You opened an account with an investment of $4,000. The value of the

 

account tripled in 18 years. If interest was compounded quarterly, what rate per

 

quarter did you earn on the account?

 

A 1.4545

 

. %

 

B 1.6640

 

. %

 

C 1.5376

 

. %

 

D 1.8479

 

. %

 

E. 1.3165 % F. 2.3374 % G 1.9441

 

. %

 

H 1.1510

 

. % 6 points QUESTION 16

 

1.

 

The risk premium for an investment is 3 percent. The inflation premium is 4

 

percent. If the pure rate of interest in the market is 4.5 percent, what should be the

 

yield on a risk-free security? Use exact formulation.

 

A 7.12

 

. %

 

B 8.16

 

. %

 

C 9.20

 

. %

 

D 6.60

 

. %

 

E. 7.64 % F. 8.68 % G 6.08

 

. %

 

H 9.72

 

. % 6 points QUESTION 17

 

1.

 

Quick Corporation has current liabilities of $7,200, inventory of $2,900, and

 

net working capital of $3,000. What is its quick ratio?

 

A 0.96

 

. 30

 

B 0.90

 

. 48

 

C 0.93

 

. 75

 

D 1.02

 

. 56

 

E. 1.00 00 F. 1.03 57 G 1.01

 

. 39

 

H 0.98

 

. 33

 


Solution details:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Sep 18, 2020

PRICE: $15

Solution~0001001259.zip (25.37 KB)

Buy this answer for only: $15

This attachment is locked

We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free copy from our tutoring website www.aceyourhomework.com (Deadline assured. Flexible pricing. TurnItIn Report provided)

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Sep 18, 2020

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN YOUR SET DEADLINE.

Order Now