Question
QUESTION 13 Which one of the following is correct concerning the annual percentage rate (APR)? A. The APR considers all the effects of compounding. B.
QUESTION 13
- 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
- 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
- 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%)
- 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
- 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
- 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%)
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