A. Property Taxes B. Rational Decision-Making Model
C. Stocks
D. Mutual Funds
E. Commercial Banks
F. Bonds
1.
a company that brings together money from many people and invests it in stocks, bonds or other
assets.
2.
3.
based on making choices that result in the optimal level of benefit or utility for an individual.
refers to a financial institution that accepts deposits, offers checking account services, makes various
loans, and offers basic financial products like certificates of deposit (CDs) and savings accounts to
individuals and small businesses.
paid on property owned by an individual or other legal entity, such as a corporation.
a security that represents the ownership of a fraction of a corporation.
fixed income instrument that represents a loan made by an investor to a borrower.
4.
5.
6.

What preforms the best over the long term? a) bonds b) mutual funds c) stocks d) certificate of deposit

Burke enterprises is considering a machine costing $30 billion that will result in initial after-tax cash savings of $3.7 billion at the end of the first year, and these savings will grow at a rate of 2 percent per year for 11 years. after 11 years, the company can sell the parts for $5 billion. burke has a target debt/equity ratio of 1.2, a beta of 1.79. you estimate that the return on the market is 7.5% and t-bills are currently yielding 2.5%. burke has two issuances of bonds outstanding. the first has 200,000 bonds trading at 98% of par, with coupons of 5%, face of $1000, and maturity of 5 years. the second has 500,000 bonds trading at par, with coupons of 7.5%, face of $1000, and maturity of 12 years. kate, the ceo, usually applies an adjustment factor to the discount rate of +2 for such highly innovative projects. should the company take on the project?

Wilson company paid $5,000 for a 4-month insurance premium in advance on november 1, with coverage beginning on that date. the balance in the prepaid insurance account before adjustment at the end of the year is $5,000, and no adjustments had been made previously. the adjusting entry required on december 31 is: (a) debit cash. $5,000: credit prepaid insurance. $5,000. (b) debit prepaid insurance. $2,500: credit insurance expense. $2500. (c) debit prepaid insurance. $1250: credit insurance expense. $1250. (d) debit insurance expense. $1250: credit prepaid insurance. $1250. (e) debit insurance expense. $2500: credit prepaid insurance. $2500.