Finc Final Exam With Correct Answers

Which one represents a source of cash for a company? A. Increase in common stock B. Decrease in liability C. Increase in fixed asset {Ans: Answer: A: Increase in common stock}A project costs $10,000 today, but generates $2,000, $6,000, and $8,000 over the next three years. What is the payback period? A. 1.5 years B. 2.25 years C. 3 years {Ans: Answer: B: 2.25}Choose the correct statement. The topic is on assessing the risk of an individual asset. A. Systematic risk can be diversified away B. Systematic risk is measured by standard deviation C. Systematic risk is measured by beta D. Systematic risk is firm specific in nature {Ans: Answer: C: Systematic risk is measured by beta}What is the payment on a 20 - year fully amortized loan of $1,000,000 with an interest rate 8%? Assume annual payments A. $68,721 B. $88,990 C. $101,852 {Ans: Answer: C: $101,852 Calculations input: N=20 I/Y=8 PV=1,000,000 FV=0 PMT=? CPT, PMT}Total taxes owed divided by taxable income is the: A. Average Tax Rate B. Marginal Tax Rate C. Residual Tax Rate {Ans: Answer: A: Average Tax Rate}A corporate bond has a 8% coupon rate (paid semiannually), $1,000 par value,