These are fairly simple quest questions if you can provide the correct answers T

Question

These are fairly simple quest questions if you can provide the correct answers

The shareholders of common stock of a corporation:

Select one:

a. receive tax-free income because profits are taxed at the corporate level.

b. share equally in any losses created by the firm.

c. are protected from any losses exceeding their equity investment in the firm.

d. are personally liable for a percentage of the firm's debts.

e. are protected from any financial losses.

You will receive annual payments of $4,000 at the end of each year for ten years. The first payment will be received in year 3. What is the present value of these payments if the discount rate is 9 percent?

Which one of the following will increase the net working capital of a firm?

Select one:

a. obtaining a 3-year loan to purchase inventory

b. paying a supplier for a recent purchase

c. obtaining a 5-year loan to buy equipment

d. collecting payment from a customer

e. making a payment on a long-term debt

Select one:

a. $25,670.63

b. $27,176.56

c. $19,882.44

d. $21,606.46

e. $23,551.04

A credit card has an APR of 14.9 percent and charges interest monthly. The effective annual rate on this account:

Select one:

a. can either be greater than or equal to 14.9 percent.

b. will be less than 14.9 percent.

c. will be greater than 14.9 percent.

d. can either be less than or equal to 14.9 percent.

e. will equal 14.9 percent.

A loan disclosure, as required by law, states that a credit card has an interest rate of 18.2 percent. Interest is compounded on a quarterly basis. What is the effective annual rate?

Select one:

a. 16.96 percent

b. 19.64 percent

c. 16.84 percent

d. 17.08 percent

e. 19.48 percent

Explanation / Answer

Answer-1:

Share in common stock has a limited liability . and the liability is the maximum amount called on shares. It means even in case of loss the shareholder shall not pay amount more than the value of share called. In other words the loss to the shareholder is limited up to the investment.

Hence the answer shall be :

c. are protected from any losses exceeding their equity investment in the firm.

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