Economics Questions from Jan 22,2025

Browse the Economics Q&A Archive for Jan 22,2025, featuring a collection of homework questions and answers from this day. Find detailed solutions to enhance your understanding.

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The primary goal of financial management is to maximize: a. revenue growth. b. current profits. c. market share. d. the market value of existing stock. e. current dividends. The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict? a. Formative b. Organizational c. Territorial d. Structural e. Agency The goal of financial management is to increase the: a. dividends paid per share. b. future value of the firm's total equity. c. number of shares outstanding. d. book value of equity. The daily financial operations of a firm are primarily controlled by managing the: a. working capital. b. long-term liabilities. c. capital structure. d. capital budget. e. total debt level. Security dealers: a. match buyers with sellers. b. operate exclusively in auction markets. c. are limited to trading non-listed stocks. d. operate on a physical trading floor. e. buy and sell from their own inventory. Perpetuities. The Canadian Government has once again decided to issue a consol (a bond with a never-ending interest payment and no maturity date). The bond will pay \( \$ 40 \) in interest each year (at the end of the year), but it will never return the principal. The current discount rate for Canadian government bonds is \( 8 \% \). What should this consol bond sell for in the market? What if the interest rate should fall to \( 7 \% \) ? Rise to \( 9 \% \) ? Why does the price go up when interest rates fall? Why does the price go down when interest rates rise? If the current discount rate for Canadian government bonds is \( 8 \% \), what should this bond sell for in the market? \( \$ \square \) (Round to the nearest cent.) Maria is the sole proprietor of an antique store that is located in a rented warehouse. The store has an outstanding loan with the local bank but no other debt obligations. There are no specific assets pledged as security for the loan. Due to a sudden and unexpected downturn in the economy, the store is unable to generate sufficient funds to pay the loan payments due to the bank. Which of the following options does the bank have to collect the money it is owed? 1. I. Sell the inventory and apply the proceeds to the debt 2. II. Sell the lighting fixtures from the building and apply the proceeds to the debt 3. III. Withdraw funds from Maria's personal account at the bank to pay the store's debt 4. IV. Sell any assets Maria personally owns and apply the proceeds to the store's debt Levi had an unexpected surprise when he returned home this morning. He found that a chemical spill from a local manufacturer had spilled over onto his property. The potential claim that he has against this manufacturer is that of a(n): a. debtholder. b. shareholder. c. agent. d. general creditor. e. stakeholder. \( 1 \leftarrow \) Amortization. Loan Consolidated Incorporated (LCI) is offering a special one-time package to reduce Custom Autos' outstanding bills to one easy-to-handle payment plan. LCI will pay off the current outstanding bills of \( \$ 230,000 \) for Custom Autos if Custom Autos will make an annual payment to LCI at an interest rtae of \( 12 \% \) over the next 5 years. a. What are the annual payments of the loan? b. What is the amortization schedule for this loan if Custom Autos wants to pay off the loan before the loan maturity in 5 years? d. What is the total interest expense on the loan over the 5 years? \( \$ \square \) (Round to the nearest cent.) In a general partnership, each partner is personally liable for: a. his or her proportionate share of all partnership debts regardless of which partner incurred that debt. b. the debts of the partnership up to the amount he or she invested in the firm. c. all personal and partnership debts incurred by any partner, even if he or she was unaware of those debts. d. only the partnership debts that he or she personally created.
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