11.Which of the following statements is CORRECT?

a. Operating plans provide management with detailed implementation guidance, consistent with the corporate strategy, to help meet the corporate objectives. These operating plans can be developed for any time horizon, but many companies use a 5-year horizon.

b. The corporate scope is a condensed version of the entire set of strategic plans.

c. Once a firm has defined its purpose, scope, and objectives, it must develop a strategy or strategies for achieving its goals. The statement of corporate strategies sets forth detailed plans rather than broad approaches for achieving a firm's goals.

d. A firms corporate purpose states the general philosophy of the business and provides managers with specific operational objectives.

15.

At Crystal Park, a ski chalet costs $250,000 now. Before Josh and Julie retire from successful investment banking careers, inflation is expected to cause this price to increase by 5 percent per year over the next 10 years. How large must an equal annual end-of-year deposit be made into an account paying a 13 percent annual interest rate in order to purchase the ski chalet upon retirement?

a. $ 8,333

b. $22,109

c. $13,572

d. $25,005

16.If Marry received $10,000 today and deposited the amount into an investment account that pays 12% interest compounded quarterly for 6 years, calculate the future value.

a. $32,846

b. $21,524

c. $5,456

d. $20,328

17.Which of the following statements is CORRECT?

a. Other things held constant, the less debt a firm uses, the lower its return on total assets will be.

b. The return on common equity (ROE) is generally regarded as being less significant, from a stockholder's viewpoint, than the return on total assets (ROA).

c. Suppose you are analyzing two firms in the same industry. Firm A has a net profit margin of 10% versus a margin of 8% for Firm B. Firm A's debt ratio is 70% versus 20% for Firm B. Based only on these two facts, you cannot reach a conclusion as to which firm is better managed, because the difference in debt, not better management, could be the cause of Firm A's higher profit margin.

d. The price/earnings (P/E) ratio tells us how much investors are willing to pay for a dollar of current earnings. In general, investors regard companies with higher P/E ratios as being more risky and/or less likely to enjoy higher future growth.

e. The advantage of the basic earning power ratio (BEP) over the return on total assets for judging a company's operating efficiency is that the BEP does not reflect the effects of debt and taxes.

18.

Your finance lecturer, suggests that you should have $1,500,000 in your retirement portfolio before you even THINK about retiring. Recently, you received $200,000 from your wealthy grandmother as a birthday present. How much of the $200,000 must you set aside today if you invest a portion of the money at an annual rate of 7.0% and you wish to retire in 30 years with the amount suggested by your finance lecturer?

a. $149,066

b. $197,051

c. $169,086

d. At an annual rate of return of 7.0%, $200,000 is not a large enough investment to reach the goal amount of $1,500,000 in 30 years.

20.Emma wishes to accumulate $1,000,000 by the end of 20 years by making equal annual end-of-year saving deposits over the next 20 years. How much must she deposit at the end of each year, assuming if she can earn 10% per annum on his investments?

a. $ 50,000

b. $ 14,900

c. $117,453

d. $ 17,460