Exam 1 review

Real rates, inflation rates, and nominal rates

The fisher effect is defined as which of the following variables?

uses of cash

Activities of a firm that require the spending of cash is known as ________

coupon

Anna just received the semi-annual payment of $35 on a bond she owns. This is called a _____ payment.

interest on interest

Art invested $100 two years ago at 8 percent interest. The first year, he earned $8 interest on his $100 investment. He reinvested the $8. The second year, he earned $8.64 interest on his $108 investment. The extra $.64 he earned in interest the second year is referred to as:

coupon rate decreases and the time to maturity increases.

In response to a change in market rate of interest, the price sensitivity of a bond increases as the _________

The project that is acceptable at a discount rate of 12 percent should be rejected at a discount rate of 13 percent.

Javangula Foods is considering two mutually exclusive projects and has determined that the crossover rate for these projects is 12.3 percent. Given this information, you know that:

The net working capital turnover rate increased.

The Natural Pet had sales of $763,500 in 2020, and $864,200 in 2021. The firm's current accounts remained constant. Given this information, which one of the following statements must be true?

Operating Cash Flow

The cash flow that results from a company's ongoing normal business activities is called ________

Net Present Value (NPV)

When evaluating two mutually exclusive projects, the final decision of which project to accept ultimately depends on which one of the following?

SuperDOT

Which is an electronic system used by the new york stock exchange for directly transmitting orders to designated market makers?

modified internal rate of return that exceeds the required return

Which of the following is a project acceptance indicator given an independent project with conventional cash flows?

The term structure of interest rates and the time to maturity are always directly related

Which of the following statements is false concerning the term structure of interest rates?

production equipment Explanation: Tangible fixed assets means asset having physical Value.

which one of the following is classified as a tangible fixed asset?