Question

In: Finance

1. The foreign exchange rate for the purchase or sale of foreign currency at an agreed...

1. The foreign exchange rate for the purchase or sale of foreign currency at an agreed future date is called the ________ exchange rate.

A. forecast

B. spot

C. interest

D. forward

E. estimated

2. Retained earnings have no cost to a company because there are no dividend or interest payments required for them.

A. True

B. False

3. A firm's total assets at the end of last year were $507,000 and its net income was $46,270. What was its return on total assets?

A. 8.94%

B. 9.13%

C. 10.04%

D. 9.62%

E. 8.51%

4. Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC)?

A. Long-term debt

B. Retained earnings

C. Accounts payable related to purchases

D. Common stock

E. Preferred stock

Expert Solution

1. The foreign exchange rate for the purchase or sale of foreign currency at an agreed future date is called the ________ exchange rate.

answer is Option d. Forward

A forward rate is an interest rate is an interest rate applicable to a financial transaction that will take place in the future

2. Retained earnings have no cost to a company because there are no dividend or interest payments required for them.

the above statement is false. because,

cost of retained earnings is the earnings forgone by the shareholders. in other words, the opportunity cost of retained earnings may be taken as the cost of retained earnings

3. A firm's total assets at the end of last year were $507,000 and its net income was $46,270. What was its return on total assets?

net income =$46,270/$507,000 = 9.13%

The answer is option B

4. Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC)?

When all options except option c are capital component while calculating WACC,

the answer is Option c Accounts payable related to purchases

jeff jeffy answered 1 year ago

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