Fin 221 - Study guides, Class notes & Summaries

ABCTE Elementary Education Exam 206 Questions with Verified Answers Magna Carta - CORRECT ANSWER (1215) a charter of liberties (freedoms) that King John "Lackland" of Englad was forced to sign; it made the king obey the same laws as the citizens of his kingdom 13th Ammendment - CORRECT ANSWER officially abolished slavery, prohibits involuntary servitude. Articles of Confederation - CORRECT ANSWER 1st Constitution of the U.S. (weaknesses-no executive, no judicial, no power to tax, no ...

FIN3701 FINANCIAL MANAGEMENT MAY/JUNE 2017 MEMO (Q1) 2 cost 1 000 000 Accumulated depreciation (20% x 1 000 000) x 3 (600 000) 400 000 (Q2) 2 proceeds 200 000 Book value (400 000) Loss (200 000) Tax benefit (29% x 200 000) 58 000 (Q3) 1 200 000 + 58 000 (Q4) 3 750 000+20 000+5000-258 000-7000 (Q5) 2 (Q6) 2 (Q7) 1 (Q8) 2 NPV = PI (initial investment)-initial investment (Q9) 2 (Q10) 1 (Q11) 1 discount rate= 6%+0.9(9-6) =8.7 NPV= 400 000{(1.0875 -1)/0.087(1.0875...

Insurance Correct Answer Protection against possible financial loss Insurer Correct Answer a risk-sharing firm that agrees to assume financial responsibility for losses that may result from an insured risk Types of Risks Correct Answer 1. Risk 2. Peril 3. Hazard Risk Correct Answer uncertainty or lack of predictability Peril Correct Answer The cause of a possible loss Hazard Correct Answer increases the likelihood of loss through some peril Pure Risk Correct Answer a chance o...

Which of the following statements is NOT correct? Correct Answer An investment that compounds interest semiannually, and has a nominal rate of 10%, will have an effective rate less than 10% Which of the following investments provides the highest effective rate of return? Correct Answer An investment that has a 9.9% nominal rate and quarterly annual compounding Which of the following statements regarding a 30-year, $100,000 mortgage with a nominal interest rate of 10%, compounded monthly, i...

FIN 221 Exam 1 QUESTIONS AND CORRECT ANSWERS When interest rate goes down the present value goes __? - ANSWER Up What is an ordinary annuity? - ANSWER a sequence of equal cash flows, occurring at the end of each period What is an annuity due? - ANSWER a sequence of periodic cash flows occurring at the beginning of each period What is a future value? - ANSWER the amount to which an investment will grow after earning interest What is compound interest? - ANSWER interest earned on inter...

Sarbanes-Oxley Act Correct Answer A law passed by Congress that requires the CEO and CFO to certify that their firm's financial statements are accurate Proprietorship Correct Answer An unincorporated business owned by one individual Partnership Correct Answer An unincorporated business owned by two or more persons Corporation Correct Answer A legal entity created by a state, separate and distinct from its owners and managers, having unlimited life, easy transferability of ownership, an...

Which of the following is true if a company misses a dividend payment on cumulative preferred stock? Correct Answer the current and past missed preferred stock dividend payments must be made before a common stock dividend payment can be made Which of the following would be a reasonable estimate for a company's before-tax cost of debt? Correct Answer the yield to maturity on the company's existing bonds Which of the following is not an input in a company's WACC? a. retained earnings b....

When interest rate goes down the present value goes __? Correct Answer Up What is an ordinary annuity? Correct Answer a sequence of equal cash flows, occurring at the end of each period What is an annuity due? Correct Answer a sequence of periodic cash flows occurring at the beginning of each period What is a future value? Correct Answer the amount to which an investment will grow after earning interest What is compound interest? Correct Answer interest earned on interest What is ...

Income Statement Correct Answer Gives details about the firm's sales, costs, and profits for the past accounting period. Annual Report Correct Answer Is required by the SEC and includes the audited document that shows the company's financial results for the past year and management's discussion about the future outlook and plans. Statement of Cash Flows Correct Answer Gives details about the company's cash at the beginning of the year and what is left at the end of the year, including ...

What is a firm's intrinsic value? Correct Answer an estimate of a stock's "true" value based on accurate risk and return data; it can be estimated but not measured precisely What is a firm's current stock price? Correct Answer it's market price-the value based on perceived but possibly incorrect information as seen by the marginal investor Is the stock's "true" long-run value more closely related to its intrinsic value or to its current price? Correct Answer intrinsic value Wh...

Steps for a personal financial plan Correct Answer 1. Determine current financial situations 2. Develop financial goals 3. Identify alternative courses of action 4. Evaluate alternatives 5. Create and implement your financial action plan 6. Review and revise your financial plan Future value computations are often referred to as: a. Compounding. b. Present value. c. Simple interest. d. An annuity. e. Discounting. Correct Answer Compounding If you deposit $500 into a savings accoun...