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BUSE2000 BUSE2001 TUT 1 BLOCK 1

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TUTORIAL 1: BLOCK 1
BUSE2000/1
1. The following are examples of intangible assets except:
A.
B.
C.
D.
Building
Trademarks
Patents
Technical expertise
2. The following are examples of tangible assets except:
A.
B.
C.
D.
Machinery
Factories
Trademarks
Offices
1
3. A firm's investment decision is also called the:
A.
B.
C.
D.
Financing decision
Liquidity decision
Capital budgeting decision
None of the above
4. The following are examples of financial assets except:
A.
B.
C.
D.
Common stock
Bank loan
Preferred stock
Buildings
2
5. Conflicts of interest between shareholders and managers of a firm result in:
A.
B.
C.
D.
Principal-agent problem
Increased agency costs
Both A and B
Managers owning the firm
6. The financial goal of a corporation is to:
A.
B.
C.
D.
Maximize profits
Maximize sales
Maximize the value of the firm for the shareholders
Maximize managers' benefits
3
7. The purchase of real assets is also referred to as the:
A.
B.
C.
D.
Capital decision
CFO decision
Financing decision
Investment decision
8. The following are some of the actions shareholders can take if the corporation is not
performing well:
A.
B.
C.
D.
Replace the board of directors in an election.
Force the board of directors to change the management team.
Sell their shares of stock in the corporation.
Any of the above
9. If the five-year present value annuity factor is 3.60478 and four-year present value
annuity factor is 3.03735, what is the present value at the $1 received at the end of
five years?
A.
B.
C.
D.
$0.63552
$1.76233
$0.56743
None of the above
10. What is the present value annuity factor at a discount rate of 11% for 8 years?
A. 5.7122
B. 11.8594
C. 5.1461
D. None of the above
11. What is the present value of $1000 per year annuity for five years at an interest rate of
12%?
A.
B.
C.
D.
$6,352.85
$3,604.78
$567.43
None of the above
12. For $10,000 you can purchase a 5-year annuity that will pay $2504.57 per year for
five years. The payments are made at the end of each year. Calculate the effective
annual interest rate implied by this arrangement: (approximately)
A.
B.
C.
D.
8%
9%
10%
None of the above
4
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