MGMT 200 Exam 4 with answers.

MGMT 200 Exam 4 with answers |\ |\ |\ |\ |\




1) Which of the following is not a primary source of
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



corporate debt financing? |\ |\




A) Bonds Payable.
|\ |\




B) Common Stock.
|\ |\




C) Leases.
|\




D) Notes Payable. - CORRECT ANSWERS ✔✔B) Common
|\ |\ |\ |\ |\ |\ |\ |\



Stock.


2) In each succeeding payment on an installment note:
|\ |\ |\ |\ |\ |\ |\ |\




A) The amount that goes to decreasing the carrying value
|\ |\ |\ |\ |\ |\ |\ |\ |\



of the note increases.
|\ |\ |\ |\




B) The amount that goes to decreasing the carrying value
|\ |\ |\ |\ |\ |\ |\ |\ |\



of the note decreases.
|\ |\ |\ |\




C) The amount that goes to decreasing the carrying value
|\ |\ |\ |\ |\ |\ |\ |\ |\



of the note is unchanged.
|\ |\ |\ |\ |\




D) The amounts paid for both interest and principal
|\ |\ |\ |\ |\ |\ |\ |\ |\



increase proportionately. - CORRECT ANSWERS ✔✔A) The
|\ |\ |\ |\ |\ |\ |\



amount that goes to decreasing the carrying value of the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\



note increases.
|\




3) Camp Elim obtains a $125,000, 6%, five-year loan for a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\



new camp bus on January 1, 2021.What amount will be
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\

,recorded for interest expense for the first month's
|\ |\ |\ |\ |\ |\ |\ |\



payment on January 31,2021? |\ |\ |\




A) $625
|\




B) $125
|\




C) $7,500
|\




D) $1,000 - CORRECT ANSWERS ✔✔A) $625
|\ |\ |\ |\ |\ |\




4) Which of the following represents an advantage of
|\ |\ |\ |\ |\ |\ |\ |\ |\



leasing rather than buying an asset with an installment
|\ |\ |\ |\ |\ |\ |\ |\ |\



note?
A) Leasing may offer protection against the risk of
|\ |\ |\ |\ |\ |\ |\ |\ |\



declining asset values. |\ |\




B) Lease payments often are lower than installment
|\ |\ |\ |\ |\ |\ |\ |\



payments.
C) Leasing offers flexibility and lower costs when
|\ |\ |\ |\ |\ |\ |\ |\



disposing of an asset. |\ |\ |\




D) All of the other answer choices are correct. - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



ANSWERS ✔✔D) All of the other answer choices are |\ |\ |\ |\ |\ |\ |\ |\ |\



correct.


5) On April 1, 2021, a company signs a 20-month lease
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\



for equipment. Monthly payments of$554.15 begin on
|\ |\ |\ |\ |\ |\ |\



May 1, 2021. The company's normal borrowing rate is
|\ |\ |\ |\ |\ |\ |\ |\ |\



12%. For what amount would the company record the
|\ |\ |\ |\ |\ |\ |\ |\ |\



lease on April 1, 2021 (rounded to nearest whole dollar)?
|\ |\ |\ |\ |\ |\ |\ |\ |\

, A) $12,000.
|\




B) $11,083.
|\




C) $10,000.
|\




D) $10,800. - CORRECT ANSWERS ✔✔C) $10,000.
|\ |\ |\ |\ |\ |\




6) Convertible bonds:
|\ |\




A) Provide potential benefits only to the issuer.
|\ |\ |\ |\ |\ |\ |\




B) Provide potential benefits only to the investor.
|\ |\ |\ |\ |\ |\ |\




C) Provide potential benefits to both the issuer and the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\



investor.
D) Provide no potential benefits. - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\



✔✔C) Provide potential benefits to both the issuer and the
|\ |\ |\ |\ |\ |\ |\ |\ |\



investor.
|\




12) In terms of total sales, assets, and earnings, the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\



dominant form of business organization is a:
|\ |\ |\ |\ |\ |\




A) Sole proprietorship.
|\ |\




B) Partnership.
|\




C) Corporation.
|\




D) Limited liability company (LLC). - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\



✔✔C) Corporation.
|\




13) Authorized common stock refers to the total number
|\ |\ |\ |\ |\ |\ |\ |\ |\



of shares:
|\