Multiple Choice 31 29

Many Multiple Choice 1 0

Short 4 N/A

Grade Details - All Questions

Page: 1 2 3 1. Question :

(TCO 1) What is the goal of financial management for a sole proprietorship?

Student Answer: Decrease long-term debt to reduce the risk to the owner maximize net income given the resources of the firm CORRECT maximize the market value of the equity minimize the tax impact on the proprietor minimize costs and increase production Instructor Explanation: Chapter 1, Page 11 Points Received: 3 of 3 Comments:

2. Question :

(TCO 1) Which of the these activities is not a capital budgeting task?

Student Answer: CORRECT determining

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Student Answer: $93,000 CORRECT $53,500 $84,300 $52,000 Instructor Explanation: Chapter 5 Pages 130-131, Formula 5.1 Present Value of an annuity - $6500 x 8.244 (8%, 14 periods) = $53,586 Points Received: 3 of 3 Comments:

12. Question :

(TCO 3) Paper Pro recently purchased a printing machine costing $97,000. The company financed this purchase at 8.25 percent interest, with monthly payments of $2,379.45. How many years will it take the firm to pay off this debt?

Student Answer: 3.0 years CORRECT 4.0 years 4.25 years 4.5 years 5.0 years Instructor Explanation: Chapter 5 Pages 132-133

Points Received: 3 of 3 Comments:

13. Question :

(TCO 3) Fine Oak Woodworks is considering a project that has cash flows of $6,000, $4,000, and $3,000 for the next three years. If the appropriate discount rate of this project is 10 percent, which of the following statements is true?

Student Answer: The current value of the project’s inflows is $13,000 CORRECT The approximate current value of the project’s inflows is $11,000 The current value of the project’s inflows cannot be determined The project should be rejected because its present value is negative Instructor Explanation: Chapter 5 Pages 124-127

PV = (6,000/1.10) + (4,000/1.10^2) + (3,000/1.10^3)

Points Received: 3 of 3 Comments:

14. Question :

(TCO 4) You are