MGMT 200 Exam 4 with 100% accurate solutions || || || || || || ||
1) Which of the following is not a primary source of corporate debt financing?
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A) Bonds Payable.
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B) Common Stock.
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C) Leases.
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D) Notes Payable. - ✔✔B) Common Stock.
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2) In each succeeding payment on an installment note:
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A) The amount that goes to decreasing the carrying value of the note increases.
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B) The amount that goes to decreasing the carrying value of the note decreases.
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C) The amount that goes to decreasing the carrying value of the note is unchanged.
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D) The amounts paid for both interest and principal increase proportionately. - ✔✔A)
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The amount that goes to decreasing the carrying value of the note increases.
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3) Camp Elim obtains a $125,000, 6%, five-year loan for a new camp bus on January
|| || || || || || || || || || || || || || || ||
1, 2021.What amount will be recorded for interest expense for the first month's
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payment on January 31,2021? || || ||
A) $625||
B) $125||
C) $7,500
||
D) $1,000 - ✔✔A) $625
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4) Which of the following represents an advantage of leasing rather than buying an
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asset with an installment note?
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A) Leasing may offer protection against the risk of declining asset values.
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, B) Lease payments often are lower than installment payments.
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C) Leasing offers flexibility and lower costs when disposing of an asset.
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D) All of the other answer choices are correct. - ✔✔D) All of the other answer choices
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are correct.||
5) On April 1, 2021, a company signs a 20-month lease for equipment. Monthly
|| || || || || || || || || || || || || ||
payments of$554.15 begin on May 1, 2021. The company's normal borrowing rate is
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12%. For what amount would the company record the lease on April 1, 2021 (rounded
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to nearest whole dollar)?
|| || ||
A) $12,000.
||
B) $11,083.
||
C) $10,000.
||
D) $10,800. - ✔✔C) $10,000.
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6) Convertible bonds:
|| ||
A) Provide potential benefits only to the issuer.
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B) Provide potential benefits only to the investor.
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C) Provide potential benefits to both the issuer and the investor.
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D) Provide no potential benefits. - ✔✔C) Provide potential benefits to both the issuer
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and the investor.|| ||
12) In terms of total sales, assets, and earnings, the dominant form of business
|| || || || || || || || || || || || || ||
organization is a: || ||
A) Sole proprietorship.
|| ||
B) Partnership.
||
C) Corporation.
||
D) Limited liability company (LLC). - ✔✔C) Corporation.
|| || || || || || ||
1) Which of the following is not a primary source of corporate debt financing?
|| || || || || || || || || || || || ||
A) Bonds Payable.
|| ||
B) Common Stock.
|| ||
C) Leases.
||
D) Notes Payable. - ✔✔B) Common Stock.
|| || || || || ||
2) In each succeeding payment on an installment note:
|| || || || || || || ||
A) The amount that goes to decreasing the carrying value of the note increases.
|| || || || || || || || || || || || ||
B) The amount that goes to decreasing the carrying value of the note decreases.
|| || || || || || || || || || || || ||
C) The amount that goes to decreasing the carrying value of the note is unchanged.
|| || || || || || || || || || || || || ||
D) The amounts paid for both interest and principal increase proportionately. - ✔✔A)
|| || || || || || || || || || || || ||
The amount that goes to decreasing the carrying value of the note increases.
|| || || || || || || || || || || ||
3) Camp Elim obtains a $125,000, 6%, five-year loan for a new camp bus on January
|| || || || || || || || || || || || || || || ||
1, 2021.What amount will be recorded for interest expense for the first month's
|| || || || || || || || || || || || ||
payment on January 31,2021? || || ||
A) $625||
B) $125||
C) $7,500
||
D) $1,000 - ✔✔A) $625
|| || || ||
4) Which of the following represents an advantage of leasing rather than buying an
|| || || || || || || || || || || || || ||
asset with an installment note?
|| || || ||
A) Leasing may offer protection against the risk of declining asset values.
|| || || || || || || || || || ||
, B) Lease payments often are lower than installment payments.
|| || || || || || || ||
C) Leasing offers flexibility and lower costs when disposing of an asset.
|| || || || || || || || || || ||
D) All of the other answer choices are correct. - ✔✔D) All of the other answer choices
|| || || || || || || || || || || || || || || || ||
are correct.||
5) On April 1, 2021, a company signs a 20-month lease for equipment. Monthly
|| || || || || || || || || || || || || ||
payments of$554.15 begin on May 1, 2021. The company's normal borrowing rate is
|| || || || || || || || || || || || ||
12%. For what amount would the company record the lease on April 1, 2021 (rounded
|| || || || || || || || || || || || || || ||
to nearest whole dollar)?
|| || ||
A) $12,000.
||
B) $11,083.
||
C) $10,000.
||
D) $10,800. - ✔✔C) $10,000.
|| || || ||
6) Convertible bonds:
|| ||
A) Provide potential benefits only to the issuer.
|| || || || || || ||
B) Provide potential benefits only to the investor.
|| || || || || || ||
C) Provide potential benefits to both the issuer and the investor.
|| || || || || || || || || ||
D) Provide no potential benefits. - ✔✔C) Provide potential benefits to both the issuer
|| || || || || || || || || || || || || ||
and the investor.|| ||
12) In terms of total sales, assets, and earnings, the dominant form of business
|| || || || || || || || || || || || || ||
organization is a: || ||
A) Sole proprietorship.
|| ||
B) Partnership.
||
C) Corporation.
||
D) Limited liability company (LLC). - ✔✔C) Corporation.
|| || || || || || ||
