Interest Rate, Values, and Business Organizational Forms
Not what you're looking for?
1. You have just taken out a 10-year, $12,000 loan to purchase a new car. This loan is to be repaid in 120 equal end-of-month installments. If each of the monthly installments is $150, what is the effective annual interest rate on this car loan?
a. 6.5431
B. 7.8942
C. 8.6892
D. 8.8869
E. 9.0438
2. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.
3. Which of the following statements is most correct?
A. The present value of an annuity due will exceed the present value of an ordinary annuity.
b. The future value of an annuity due will exceed the future value of an ordinary annuity.
c. The nominal interest rate will always be greater than or equal to the effective annual interest rate
d. Statements a and b are correct
E. All of the statements above are correct
4. Which of the following could explain why a business might choose to organize as a corporation rather thatn as a sole proprietorship or a partnership.
a. Corporations generally face fewer regulations
b. Corporations generally face lower taxes.
c. Corporations generally find it easier to raise capital
d. Corporations enjoy unlimited liability
e. Statements c and d are correct.
Purchase this Solution
Solution Summary
This solution selects the correct answer and provides justifications on concepts of interest rates, present/future values, proprietorship and business organizational forms.
Solution Preview
Attached is the RTF file with the answers.
1. - E
2.
Start-up phase - the entrepreneur thinking about the business, creates a management group (himself and partners, usually), and writes a business proposal (plan). This phase is manifested by a need for money to start the business. Appropriate organizational form - Limited Liability Partnership (LLP). Essentially. it's a General Partnership which elects to operate as an LLP. Advantage - partners in an LLP enjoy ...
Purchase this Solution
Free BrainMass Quizzes
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Motivation
This tests some key elements of major motivation theories.