Question 16 (3 points)

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Calculate the rate of return on assets: The company has total sales of $10,000,000 and expenses of 8,717,000. Total assets are $87,900,000.

Question 16 options:

	3.1%
	1.5%
	60%
	0.8%

Question 17 (3 points)

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Calculate the Times Interest Earned Ratio: The company has a net income of $1,283. The interest is $841. The taxes are $5,607.

Question 17 options:

	9.2
	7.3
	12.2
	6.0

Question 18 (3 points)

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You buy a bond for $500,000. It pays 3% interest per year, but you get paid every 6 months.

How much will you be paid every 6 months.

Question 18 options:

	$15,000
	$5,000
	$3.50
	$7,500

Question 19 (3 points)

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You buy a bond for $500,000. It pays 3% interest per year, but you get paid every 6 months.

How much will you be paid every 6 months.

Question 19 options:

	$65,500
	$50,750
	$82,500
	$75,000

Question 20 (2.5 points)

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Leasing reduces the upfront cash needed to use an asset.

Question 20 options:

	True
	False

Question 21 (2.5 points)

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Lease payments are often higher than installment payments.

Question 21 options:

	True
	False

Question 22 (3 points)

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Which of the following are true about leasing? Choose as many as apply.

Question 22 options:

	Leasing offers flexibility and a lower cost when disposing of the asset
	Leasing might offer protection against the risk of declining asset values
	Leasing might offer tax advantages
	Leasing is only good if you are the one making money, not spending

Question 23 (3 points)

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This is a provision in the lease contract that gives the lessee the option to purchase the leased property at a specified price

Question 23 options:

	Sales lease
	Purchase option
	Additional consideration clause
	Right to use option

Question 24 (3 points)

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How long should the lessee amortize the leased asset for?

Question 24 options:

	The life of the asset
	5 years of vehicles; 27.5 years for real estate
	Leased assets do not meet the qualification standards for amortization
	The term of the lease

Question 25 (2.5 points)

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If you go to a dealership and lease a car, you are the lessor.

Question 25 options:

	True
	False

Question 26 (2.5 points)

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Lease terms can never be changed.

Question 26 options:

	True
	False

Question 27 (3 points)

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When the amount of the lease payments depends on an index or a rate, such as the Consumer Price Index or current interest rates, it is called:

Question 27 options:

	Variable lease payments
	Standard amortization schedule
	Variable amortization schedule
	Modified lease terms

Question 28 (3 points)

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The ______________ of leased property is an estimate of what its commercial value will be at the end of the lease term

Question 28 options:

	Leasing differential
	Title V profit
	Residual value
	Classification

Question 29 (3 points)

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You can buy an item mid-lease if you exercise which of the following?

Question 29 options:

	Lease acquisition
	Termination penalty at right to buy
	Component payments
	Purchase option

Question 30 (2.5 points)

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A leasehold improvement is a means of making improvement to property you do not own, but actually lease.

Question 30 options:

	True
	False

Question 31 (2.5 points)

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Leasehold improvements are never a good idea because you should not pay to improve someone else's investment, even if it will help you make money or live a better life.

Question 31 options:

	True
	False