Which one of the following activities best exemplify working capital management? (Points : 4) Sale long-term bonds to raise funds for a new machine. Determine the return of a potential project. Calculate the cash flows for a project. Manage payments to suppliers. 2. (TCO 1) Market value is important to the financial manager because: (Points : 4) It reflects the value of the asset based on generally-accepted accounting principles. Is a crucial component of the balance sheet, and can impact the financial statements. Market values reflect the amount someone is willing to pay today for an asset. The market value of an asset reflects its historical cost. 3. (TCO 1) Use the following tax table to answer this question: Riddell, Inc. earned $144,320 in taxable income for the year. How much tax does the company owe on this income? (Points : 4) $39,535 $49,069 $51,285 $56,285 $78,535 4. (TCO 3) Regional Bank offers you an APR of 19 percent compounded semiannually, and Local Bank offers you an EAR of 20.10 percent for a new automobile loan. You should choose ______________ because its _______ is lower. (Points : 4) Regional Bank, APR Local Bank, EAR Regional Bank, EAR Local Bank, APR 5. (TCO 3) You deposited $11,000 in your bank account today. Which of the following will decrease the future value of your deposit, assuming that all interest is reinvested? Assume the interest rate is a positive value. Select all that apply: (Points : 4) a decrease in the interest rate increasing the initial amount of your deposit increasing the frequency of the interest payments decreasing the length of the investment period 6. (TCO 3) Amy needs to save $20,000 in cash to buy a new car five years from today. She expects to earn 6.5 percent, compounded annually, on her savings. How much does she need to deposit today, if this is the only money she saves for this purpose? (Points : 4) $12,468.07 $12,502.14 $14,597.62 $17,044.32 $17,129.01 7. (TCO 3) High Risk Operations, Inc. owes your firm $52,800. This amount is delinquent, so you have offered to arrange a payment plan in the hopes that you might at least collect a portion, if not all, of this money. Your offer will consist of weekly payments for two years, at an interest rate of four percent. What is the amount of each payment? (Points : 4) $241.29 $528.47 $736.28 $884.10 $1,036.22 8. (TCO 3) Amy borrowed $5,000 from her bank three years ago. The loan term is five years. Each year, Amy must repay the bank $1,000 plus the annual interest. Which type of loan does Amy have? (Points : 4) amortized blended discount interest-only pure discount complex 9. (TCO 3) Fanta Cola has $1,000 par value bonds outstanding at 12 percent interest. The bonds mature in 25 years. What is the current price of the bond if the YTM is 13 percent? Assume annual payments. (Points : 4) $1078 $1085 $927 $1000 10. (TCO 6) The market where one shareholder sells shares to another shareholder is called the _____ market. (Points : 4) primary main secondary principal dealer 11. (TCO 7) A taxpaying, levered firm's optimal capital structure: (Points : 4) is 100 percent equity financing. consists of equal amounts of debt and equity financing. is the mixture of debt and equity financing that minimizes the firm's aftertax cost of debt. is the mixture of debt and equity financing that minimizes the weighted average cost of capital. is 100 percent debt financing. 12. (TCO 3) SmithKline Company's bonds are currently selling for $1,157.75 per $1000 par-value bond. The bonds have a 10 percent coupon rate and will mature in 10 years. What is the approximate yield to maturity? (Points : 4) 6.96% 7.69% 11.0% 12.1% 13. (TCO 8) Which of the following is true regarding bonds? (Points : 4) Bonds do not carry default risk. Bonds are not sensitive to changes in the interest rates. Moody