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    Capital budgeting task, Book values, APR, EAR

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    31. Which of the these activities is a capital budgeting task?
    determining the amount of cash needed on a daily basis to operate a firm
    . identifying assets that produce value in excess of the cost to acquire those assets
    establishing the inventory level
    establishing a new credit policy

    32. Book values are different from market values because:
    Book values reflect the value of the asset based on generally-accepted accounting principles.
    Book values are used in the company's balance sheet.
    Book values do not reflect the amount someone is willing to pay today for an asset.
    All of the above
    None of the above

    34. Regional Bank offers you an APR of 19 percent compounded semiannually, and Local Bank offers you an EAR of 19.50 percent for a new automobile loan. You should choose ______________ because its _______ is lower.
    Regional Bank, APR
    Local Bank, EAR
    Regional Bank, EAR
    Local Bank, APR

    35. You deposited $8,000 in your bank account today. Which of the following will increase the future value of your deposit, assuming that all interest is reinvested? Assume the interest rate is a positive value. Select all that apply:
    a decrease in the interest rate
    increasing the initial amount of your deposit
    decreasing the frequency of the interest payments
    extending the length of the investment period

    36. You want to have $15,000 for a down payment on a house five years from now. If you can earn 13 percent, compounded annually, on your savings, how much do you need to deposit today to reach your goal?
    $7,858.11
    $8,141.40
    $9,803.58
    $12,464.28
    $14,213.25

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    Solution Preview

    31. Which of the these activities is a capital budgeting task?

    . identifying assets that produce value in excess of the cost to acquire those assets
    (As its a long term decision)

    32. Book values are different from market values because:

    All of the above

    34. Regional Bank offers ...

    Solution Summary

    Response discusses Capital budgeting task, Book values, APR, EAR, Value of deposit

    $2.19

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