1) A financial lease a)Usually requires the lessor to maintain the leased asset

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1) A financial lease

a)Usually requires the lessor to maintain the leased asset.

b)Is generally cancelable without penalty if the lessee provides 30 days advance notice.

c)Is generally a partially amortized lease.

d)Is generally a short-term lease.

e)May also be classified as a tax-oriented lease.

 

 

2) A project has an accounting break-even quantity of26,500 units, a cash break-even quantity of17,120 units, life of 10 years, fixed costs of $178,000, variable costs of $18.40 per unit, and are quired return of 14 percent. Depreciation is straight-line to zero over the project life. Ignoring taxes, what is the financial break-even quantity?

 

a)32,723 units

b)39,201 units

c)39,458 units

d)39,624 units

e)35,102 units

 

3)A project has expected sales of 15,000 units, plus or minus 4 percent, variable cost per unit of $120 plus or minus 3 percent, fixed costs of $311,000plus or minus 2 percent, and a sales price per unit of $168 plus or minus 2 percent. The depreciation expense is $74,000 and the tax rate is 35 percent. What is the contribution margin per unit for a sensitivity analysis using a variable cost per unit of $122?

a)$43.43

b)$46.00

c)$49.36

d)$44.00

e)$42.64

 

4) A security with yield to maturity of 5.50% maturing is selling at par. What is the price of the 1 year bond? 

 

a)$1,000.00

b)$ 1,157.6

c)$ 1,230.2

d)$950.40

 

5)Calculate the beta of a portfolio that consists of 25% Ford, 25% Boeing, and 50% McDonalds.

 

Company Beta Weight

 

Ford 1.2 25%

Boeing 1.7 25%

McDonald. 0.2 50%