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**FINANACIAL MANAGEMENT**

**1****. ****Which of the following is calculated by subtracting the cost of goods sold and administrative expense from net sales?**

**A. **Total liabilities

**B. **Operating income

**C. **Inventory cost

**D. **Accounts receivable

**2****. ****At an interest rate of 6.25% percent compounded annually, how many years will it take for an investment of $7,000 to grow to $10,000? (Round to the nearest year.)**

**A. **8 years

**B. **4 years

**C. **6 years

**D. **10 years

**3****. ****What is the present value of an annuity due if you deposit $1,200 per year for the next 5 years into an account that earns an interest rate of 5 percent annually?**

**A. **$5,195

**B. **$8,288

**C. **$6,703

**D. **$5,455

**4****. ****A beta coefficient for a risky stock is**

**A. **less than 1.0.

**B. **negative.

**C. **equal to 1.0.

**D. **greater than 1.0.

**5****. ****What is the future value of an annuity due if you deposit $1,500 per year for the next 5 years into an account that earns an interest rate of 5 percent annually?**

**A. **$7,500

**B. **$8,703

**C. **$11,914

**D. **$8,288

**6****. ****If annual interest rates are 10 percent, which of the following values is the lowest?**

**A. **The present value of an investment that will be worth $100 after 2 years

**B. **The present value of an annuity that will pay $200 a year, at the end of each of the next 4 years

**C. **The future value of a $100 investment after 3 years

**D. **The future value of an investment after 4 years, if $100 is deposited annually

**7****. ****Liabilities ****equal**

**A. **assets.

**B. **equity.

**C. **equity minus assets.

**D. **assets minus equity.

**8****. ****What is the required return using the CAPM if the stock's beta is 1.2, and the individual, who expects the market to rise by 13.2%, can earn 6.4% invested in a risk-free Treasury bill? **

**A. **14.56%

**B. **9.46%

**C. **24.58%

**D. **11.62%

**9****. ****If annual interest rates are 10 percent, which of the following values will be the greatest?**

**A. **The future value of a $100 investment after 3 years

**B. **The present value of an annuity that will pay $200 a year, at the end of each of the next 4 years

**C. **The future value of an annuity after 4 years, if $100 is deposited annually

**D. **The present value of an investment that will be worth $100 after 2 years

**10****. ****What is the future value of an ordinary annuity if you deposit $500 per year for the next 10 years in an account that earns an interest rate of 4 percent annually?**

**A. **$5,263

**B. **$6,003

**C. **$1,700

**D. **$5,000

**Financial management Solutions**

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- Submitted On 03 May, 2015 03:24:34

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