question 6

5. The opportunity cost of capital: A. is the interest rate that the firm pays on a loan from a financial institution. B. is the maximum acceptable rate of return on a project. is the minimum acceptable rate of return on a project. D. is always less than 10%. 6. What was the firm's net income if the firm paid income taxes of $2,000 and the average tax rate was 25%, X. 1,000 8,000 C. 6.000 D. 7.000 7. The year-end 2015 balance sheet of XYZ Inc. listed common stock and other paid-in capital at S1,100,000 and retained earnings at $3.500,000. The next year, retained earnings were listed at $3,800,000. The firm's net income in 2016 was $700.000. There were no stock repurchases during the year. What were the dividends paid by the firm in 2016? A. 400,000 B. 550,000 600,000 D. 800,000 8. Here are the 2015 and 2016 (incomplete) balance sheets for Newble Oil Corp. If Newble purchased 300 million in fixed assets during 2016, what must have been the depreciation charge on the income statement? 2015 2016 Current Assets 310 420 Net Fixed assets $1,200 $1,420 830 920 Current Liabilities Long term debt 80 B. 120 C. 40 D. 60 9. The founder of ABC Inc. discovered a way to turn gold into lead and patented this new technology. He then formed a corporation and invested S100,000 in setting up production plant. He believes that he could sell his patent for 540 million. What is the book value of the firm? 200,0000 B 100,0000 150,0000 D. 250,0000