Question 30 3 pts Compound interest is interest earned only on the original, principle, amount invested. O True O False Question 31 3 pts Capital spending will be negative if Othey issue new stok to investors. O a firm receives more money from the sale of fixed assets than what they purchase in fixed assets. o they use more debt finaning than equity financing. Othey purchase more in new securities than what they sell in new securities. Question 32 3 pts The percentage of sales approach is O a financial planning method in which accounts are varied depending upon a firm's predicted sales level. O The economic environment expected to prevail during the financial plan. the part of the financial plan that discusses the capital structure. The part of the financial plan that is adjusted if the sales forecast is different from expectations. Question 34 3 pts Which of the following is not an example of a capital budgeting decision? o Whether a firm should hire a company to deliver its product or whether a firm should have its own delivery service. o Whether a firm should purchase a new building. Whether a firm should open a new location. O Whether a firm should purchase from suppliers on credit. Question 35 3 pts A silver dollar collection of 50 silver dollars was purchased in 1936 for face value. The coins have appreciated in value by 7.42% annually. How much will this coin collection be worth in 2030? O 102.29 $41,780.53 O $20,423.14 $50 Question 36 3 pts Which of the following is an example of the agency problem? The office is kept very cold making it difficult for you to concentrate every day. O When the company is profitable, your boss frequently treats employees to lunch and has the company pay for the costs. O Your coworker talks loudly in their office preventing you from being able to focus on your work. Your coworker always arrives at work early and makes everyone a pot of coffee. Question 40 3 pts You just won a writing contest, and you opted to take unending payments of $100 paid annually. What is the present value of your prize with a discount rate of 2.5%? O 3,289.79 O $3,372.27 O $3,445.18 O $4,000 Question 41 3 pts You are the beneficiary of a life insurance policy. As the beneficiary, you have 2 options for receiving the insurance proceeds. Option 1 is that you can receive a lump sum of $230,000 today. Option 2 is that you can receive payments of $1,650 a month for the next 18 years. If you can earn 7.10% APR on your money, then which option should you take? O Option 2, because the present value of option 2 is 354,121.87. O Option 1, because the present value of option 2 is only $200,887.71. O Option 2, because the present value of option 2 is 330,307.85. o Option 1, because the present value of option 2 is only $16,478.37. Question 42 3 pts The cash flow resulting from a firm's ongoing normal business activities is known as their O Operating cash flow O Capital structuring O Capital spending O Net working capital
