1 of 20 : Select the best answer for the question.
1. For partial-years depreciation, if an asset is purchased on February 8, how many months’ depreciation will be taken for the year?
A. 11
B. 10
C. 12
D. 9
2 of 20 : Select the best answer for the question.
2. Ted Williams made deposits of $500 at the end of each year for eight years. The rate is 8% compounded annually. What’s the value of Ted’s annuity at the end of eight years? (Use the tables found in the textbook.)
A. $4,318.30
B. $2,837.03
C. $5,318.30
D. $2,873.30
3 of 20 : Select the best answer for the question.
3. Abby Mia wants to know how much must be deposited in her local bank today so that she will receive yearly payments of $18,000 for 20 years at a current rate of 9% compounded annually. (Use the tables found in the textbook.)
A. $164,313
B. $1,463.13
C. $1,085.82
D. $163,313
4 of 20 : Select the best answer for the question.
4. Points represent
A. an additional cost of receiving the mortgage.
B. 3% up-front payment.
C. monthly payments.
D. 2% of the amount of the loan.
5 of 20 : Select the best answer for the question.
5. Moore Corporation has earned $205,500 after tax. The return on equity for Moore Corporation is 18%. What’s Moore’s stockholders’ equity?
A. $1,141,666.67
B. $1,445,666.67
C. $1,141,696.67
D. $1,241,666.67
6 of 20 : Select the best answer for the question.
6. The balance sheet lists
A. assets, liabilities, and expenses.
B. assets, revenues, and expenses.
C. assets, revenues, and equity.
D. assets, liabilities, and equity.
7 of 20 : Select the best answer for the question.
7. Open-end credit in a revolving charge plan results in
A. as many charged purchases till credit limit is reached.
B. one purchase per month.
C. the U.S. Rule being applied to each purchase.
D. as many cash purchases till credit limit is reached.
8 of 20 : Select the best answer for the question.
8. A variable rate mortgage means
A. the rate is not subject to change.
B. the interest rate is not fixed.
C. larger monthly payments than a fixed rate.
D. the interest rate is fixed for five years.
9 of 20 : Select the best answer for the question.
9. Use the following information and the tables found in the textbook to answer this question.
$140.10 per month
Cash price: $5,600
Down payment: $0
Cash or trade months with bank-approved credit; amount financed: $5,600
Finance charge: $2,806
Total payments: $8,406
What’s the APR by table lookup?
A. 16.50%–16.75%
B. 17.00%–17.25%
C. 17.25%–17.50%
D. 16.75%–17.00%
10 of 20 : Select the best answer for the question.
10. In calculating the daily balance, cash advances are
A. always subtracted out.
B. sometimes added in.
C. always added in.
D. sometimes subtracted out.
11 of 20 : Select the best answer for the question.
11. Graduated payments result in the borrower paying
A. the mortgage at ½ the standard rate.
B. less at the end of the mortgage.
C. less at the beginning of the mortgage.
D. more at the beginning of the mortgage.
12 of 20 : Select the best answer for the question.
12. Stu Reese has a $150,000 7½% mortgage. His monthly payment is $1,010.10. His first payment will reduce the principal to an outstanding balance of
A. $149,910.40.
B. $72.60.
C. $149,927.40.
D. $149,729.40
.
13 of 20 : Select the best answer for the question.
13. Which one of the following methods is not based on the passage of time?
A. None of these
B. Straight-line method
C. Units-of-production method
D. Declining-balance method
14 of 20 : Select the best answer for the question.
14. If a car is depreciated in four years, what’s the rate of depreciation using twice the straight-line rate?
A. 100%
B. 75%
C. 25%
D. 50%
15 of 20 : Select the best answer for the question.
15. Use the following information to answer the question:
Cost of car: $26,000
Residual value: $6,000
Life: 5 years
With the information given, determine the depreciation expense for the first year using the straight-line method.
A. $4,400
B. $6,000
C. $5,200
D. $4,000
16 of 20 : Select the best answer for the question.
16. Marc bought a new split level for $200,000. Marc put down 30%. Assuming a rate of 11½% on a 30-year mortgage, use the tables found in the textbook to determine Marc’s monthly payment.
A. $1,367.80
B. $1,423.80
C. $1,982.00
D. $1,387.40
17 of 20 : Select the best answer for the question.
17. At the beginning of each year, Jerome invests $1,400 semiannually at 8% for nine years. Using the tables found in the textbook, determine the cash value of the annuity due at the end of the ninth year.
A. $38,739.68
B. $37,939.86
C. $37,399.68
D. $37,339.68
18 of 20 : Select the best answer for the question.
18. Chris bought a home for $225,000, putting down 20%. The mortgage is at 6½% for 30 years. Using the tables found in the textbook, determine his monthly payment.
A. $1,139.40
B. $1,319.04
C. $1,319.40
D. $1,216.80
19 of 20 : Select the best answer for the question.
19. What does an amortization schedule show?
A. The portion of payment broken down to interest and principal
B. The increase in loan outstanding
C. The balance of interest outstanding
D. The increase to principal
20 of 20 : Select the best answer for the question.
20. Book value is cost _______ accumulated depreciation.
A. divided by
B. plus
C. minus
D. times