QUESTION 13

1. Which one of the following is correct concerning the annual percentage rate (APR)?

	A.	The APR considers all the effects of compounding.
	B.	The APR formula for rate disclosure is [1 + (r/m)]m-1.
	C.	The APR is best used to compare offers from various lenders.
	D.	The APR is the rate which lenders are required to disclose in Canada.
	E.	The APR is greater than the effective annual rate.

QUESTION 14

1. Which of the following is an example of a positive covenant?

	A.	The firm cannot merge with another firm.
	B.	The firm cannot sell or lease any major assets without approval by the lender.
	C.	The company must maintain its working capital at or above some specified minimum level.
	D.	The firm cannot pledge any assets to other lenders.
	E.	The firm must limit the amount of dividends it pays according to some formula.

QUESTION 15

1. The current real rate is 0.0227% and the inflation rate is 0.0259%. What rate would you expect to see on a Treasury bill?

(Round your answer to 4 decimals)

(Please Note: percentage is expressed in decimals in all questions, e.g. 14% is expressed as 0.14%)

1. The following are some figures from Laura Sweet Companys 2020 financial statements: (in thousands)

Cash $228

AR 318

Inventory 331

Net PP&E 6,517

AP 285

Note Payable 1,436

Long-term Debt 2,232

Common Shares 1,041

Retained Earnings 2,270

Sales 4,069

COGS 2,562

Depreciation 567

Interest 546

Income Tax 77

Required: Calculate the following ratio (round your answer to four decimals, percentage should be expressed with decimals, e.g. 14.1% = 0.1410) Please use textbook ratio formula to calculate. Answers calculated with varied formulas would be marked as incorrect.

Long-term Debt Ratio

QUESTION 17

1. Harvey's 2019 statement of financial position showed net fixed assets of $2,585,961 million, and the 2020 statement of financial position showed net fixed assets of $4,987,550 million. The companys 2020 statement of comprehensive income showed a depreciation expense of $379,540. What was net capital spending in 2020? (Round your answer to the nearest dollar)

QUESTION 18

1. You are shopping for GIC investment. You want to earn an effective interest rate of 0.065% that compound 5 times per year. What APR you are looking for?

(Round your answer to 4 decimals)

(Please Note: percentage is expressed in decimals in all questions, e.g. 14% is expressed as 0.14%)