Question

1. What is NOT one of the 5 C’s of credit used by banks when deciding whether or not to loan someone money… A. Character B. Capacity C. Collateral D. Consistency E. Condition

2. The three primary categories of sources of capital are… A. Equity investors, Tax Rebates, Short-term loans B. Equity investors, Long-term debt obligations, Short-term loans C. Equity investors, Long-term debt obligations, Tax Rebates D. Equity investors, Tax Rebates, Bond Issuers

3. the definition of inventory turnover ratio is… A. How many times during the year the inventory is purchased and sold B. How many times during the year the inventory is turned into an asset C. How many times during the year the inventory is taxed

4. If a 7% annual return on a one-year CD would yield $135,000, then a payment of $135,000 earned in one year is valued at how much today? A. More than $135,000 B. Less than $135,000 C. Equal to $135,000 5.The definition of finance is… A. The process of calculating revenue and expenses through receipts and other facts to determine the numbers for a company or entity B. Takes the numbers and financial projections from numerous companies or entities to explore future trends C. The process of examining the numbers and determining what they mean and what the past was and future will be for a company or entity

5.

Financial leverage ratios measure the extent to which a business relies on debts (loans) rather than equity (stocks) for financing. What is NOT considered a financial leverage ratio?

A.	Debt-equity Ratio
	B.	Asset Ratio
	C.	Debt Ratio

1. If an individual has before them both a taxable investment and a non-taxable investment that have the same yield (interest rate), to maximize net profits the individual should…

   	A.	pick neither investment
   	B.	pick the taxable investment
   	C.	pick the non-taxable investment

3 points   

QUESTION 18

1. The Acid Ratio/Quick Ratio = (Total current assets – inventories)/current liabilities

   	A.	This determines if the company is losing money
   	B.	This determines if the company is profitable
   	C.	This examines whether a firm can pay its current liabilities without relying on the sale of inventories

3 points   

QUESTION 19

1. What is not a type of business structure?

   	A.	General and limited partnerships
   	B.	Subchapter T corporation
   	C.	C corporation
   	D.	Limited liability corporation or partnership

QUESTION 20

1. Mezzanine financing is available for

   	A.	New companies
   	B.	Established companies
   	C.	Bankrupt companies

  

QUESTION 21

1. Tax-equivalent yield = (tax-exempt yield) / (1 – tax rate)

   If a business has a 28% tax rate and a tax-exempt municipal bond pays 10% interest, the necessary return on a taxable investment would be?

Answer 1

1. (D) Consistency

The 5c's of credit are Character, capacity, condition, collateral and capital.

2. (B) Equity investors, Long term debt obligations, short term loans.

3. (A) How many times the inventory is purchses and sold.

Inventory turnover ratio defines how many time the company has sold and replaced the inventory during a given peroid.

4. (A) More than $ 135,000

5. (C) The process of examining the numbers and determining what they mean and what the past was and future will be for a company or entitiy.

6. (B) Asset Ratio

Debt and equity are sometimes called leverage ratio.

7.(C) Non taxable investment.

8. (C) This examines whether a irm can pay its liabalities without relying on the sale of inventories.

9. (B) Subchapter T corporation.

All others are form of busiss structure.

10. (B) Established companies

11. 48.6