finance mid term

An employee and employer contribute $3000annually for 20 years to a retirement account that earns 9 percent a year, how much will the employee be able to withdraw from the account for 25 years?

If an annuity costs 200.000 and yields 7 percent annually for 5 years, how much cash can an individual withdraw each year such that the principle is consumed at the end of the time period?

Persons owning stock on the day a dividend is declared receive the dividend? T/F

If the federal government runs a surplus

Expenditures exceed taxes

Receipts exceed disbursement

Debt must be issued

The federal reserve buys bonds

To measure risk, the capital pricing model uses

Beta

An asset standard deviation

The volatility of an assets cash flows

The term during which the asset is held

A reverse split (e.g. 1 for 10) should raise the per share price of a stock. T/F

Which of the following bonds is supported by collateral?

Unsecured bonds

Income bonds

Equipment trust certificate

Debentures

The consumer Price index (CPI) is a measure of inflation. T/F

If a Firm has retained earnings, it has an equal amount of cash. T/F

Treasury bills are

Long-term securities issued by federal government

Short-term securities issued by federal government

Long term securities issued by money market mutual funds

Short term securities issued by money market mutual funds

Leverage ratios measure

Extend to which the firm uses debt financing

The speed with which the firm sells inventory

Sales relative to some base such as equity

Capacity of the firm to meet the current obligation

Current assets include

Plant

Inventory

Equipment

Additional paid in capital (capital surplus)

The purpose for the Federal is to

Finance government operations

Protect investors from bank failures

Protect deposits from bank failures

Control the supply of money and credit

14.) Accountant suggests that assets should always be valued at their market value. T/F

15.) If the Treasury sells debt that is purchased by the Federal Reserve and uses the funds to purchase military equipment, the excess reserves of the banking system are not affected. T/F

16.) Increases in income taxes reduces a firms operating income. T/F

17.) Depreciation expense produces a cash outflow of funds, because it reduces the firm earnings. T/F

18.) Discounting is

a.) the determination of present value

b.) the determination of future value

c.) expressing the present in the future

d.) expressing the future in the present

19.) If the Treasury issues new bonds that are purchased by the general public, the money supply is reduced if the Treasury deposits the funds in the Federal Reserve. T/F

20.) If management increases a firms dividends, its growth rate should increase T/F

21.) Retained earnings are part of the stockholders equity in a corporation. T/F

22.) Current liabilities do not include

a.) short-term bank loans

b.) accrued interest

c.) accounts payable

d.) additional paid-in capital

23.) Over-the