Exam (07/02/2018) w hich one of the following statements is correct? A. A longer payback period is prefered over a shorter payback period B. The payback nule states that you should year accept a project if the payback period is less than one C. The payback period ignores the time value of money D. The payback rule is biased in favor of long-term projects. The payback period considers the timing and amount of all of a project\'s cash flows. 16. One advantage of the corporate form of organization is the: A. taxation of the corporate profits. B. unlimited liability for its shareholders. C. double taxation of profits. D. ability to raise larger sums of equity capital than other E. ease of formation compared to other organizational forms. organizational forms. 4 years from now. If you can e toda 17. You want to have $40,000 for a down payment on a 5.6 percent, compounded annually on your savings, how much reach your goal? do you need to deposit A. $32,166.54 B. $34,420.73 C. $27,880.69 D. $28,211.17 E. $30,886.40
15. The Following statement is correct :
ANSWER = C) the payback period ignores the time value of money
16. One advantage of the corporate form of orgainzatino is the:
ANSWER = D) Ability to raise larger sums of equity capital than other organizational forms
Explanation:
Liability of shareholders are limited.
It avoids double taxation of profits, taxation of corporate profit is not an advantage
Thus advantage of the corporate form of orgainzatino is the ability to raise larger sums of equity capital than other organizational forms.
17. A) $32166.54
Down payment requrie one year from now (F) = $ 40000
Interest rate = 5.6%
n = 4 years
Deposit need today to reach goal (P) = F * PVIF (i, n)
P = $ 40000 * PVIF (5.6%, 4)
= $ 40000 * 0.804163
= $ 32166.54
ANSWER = A) $32166.54
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