32. What is the goal of the firm?

A. To maximize the upcoming years profits.

B. To maximize sales revenues.

C. To maximize shareholders wealth.

D. To maximize the CEOs pay.

E. To maximize the companys assets.

33. Which of the following forms of business organizations has the greatest potential for agency conflicts?

A. A (Chapter C/regular) corporation

B. A sole proprietorship

C. A general partnership

D. None of the above has potential agency conflicts.

34. Chief Wiggums plans to make 11 semi-annual deposits of $1000 beginning today and ending 5 years from now into an account that will pay a 7% nominal annual rate compounded semi-annually. How much will Chief Wiggums have in this account 5 years from today after he makes his last deposit?

A. $13,601.96 B. $13,141.99 C. $11,501.48 D. $14,306.58 E. $12,621.94

35. Your parents are about to buy a new 2010 Ford Taurus Limited (with sunroof and other cool options) which will cost approximately $32,500. After paying tax, title & license and making a down payment, your parents will need to borrow $29,000 to complete the purchase of their new Taurus and are presented with two options. Option one is 0.0% APR financing for 60 months, the second option is $2,000 cash back which would be used as an additional down payment reducing the loan amount by this $2,000 cash back. Your parents discover that they can get 4.29% APR financing for 60 months if they elect the second (cash back) option. What is the difference in monthly payments for the two options (assume a 60-month loan term for both options)?

A. $0.00 B. $5.31 C. $10.87 D. $17.45 E. $25.34

36. AT&T would like to improve their ROE to 15%. They think they can maintain profit margin of 11% while maintaining their total asset turnover at 0.45. What total debt to total asset ratio would be needed to achieve AT&Ts ROE goal?

A. 33% B. 40% C. 58% D. 60% E. 67%

37. You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would increase the calculated value of the investment? A. The cash flows are in the form of a deferred annuity, and they total to $100,000. You learn that the annuity lasts for 10 years rather than 5 years, hence that each payment is for $10,000 rather than for $20,000. B. The discount rate decreases.

C. The riskiness of the investment's cash flows increases. D. The total amount of cash flows remains the same, but more of the cash flows are received in the later years and less are received in the earlier years. E. The discount rate increases.

38. Your grandmother just died and left you $132,500 in a trust fund that pays 6.5% interest. You must spend the money on your college education, and you must withdraw the money in 4 equal installments, beginning immediately. How much could you withdraw today and at the beginning of each of the next 3 years and end up with zero in the account? A. $37,769.20 B. $39,221.86 C. $37,406.03 D. $33,774.38 E. $36,316.54

39. At a rate of 5.0%, what is the future value of the following cash flow stream?

Years: 0 1 2 3 4 CFs: $0 $75 $225 $0 $300

A. $552.35 B. $558.70 C. $514.26 D. $704.72 E. $634.88

40. You agree to make 24 deposits of $500 at the beginning of each month into a bank account. At the end of the 24th month, you will have $13,200 in your account. If the bank compounds interest monthly, what nominal annual interest rate will you be earning? A. 10.14% B. 10.77% C. 7.79% D. 11.14% E. 9.05%