(Related to Checkpoint 5.7) (Calculating an EAR) After examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at 12 percent compounded quarterly or from a bank at 13 percent compounded monthly.

Which alternative is more attractive? If you can borrow funds from a finance company at 12 percent compounded quarterly, the EAR for the loan is nothing%. (Round to two decimal places.)
A. The loan from the finance company at 12 % compounded quarterly
B. The loan from the bank at 13 % compounded monthly

If you can borrow funds from a bank at 13 percent compounded monthly, the EAR for the loan is nothing%. (Round to two decimal places.) Based on the findings above, which alternative is more attractive? (Select the best choice below.)
A. The loan from the finance company at 12 % compounded quarterly
B. The loan from the bank at 13 % compounded monthly

Instructions: use the following information to construct the 2000 balance sheet and income statement for carolina business machines. round all numbers to the nearest whole dollar. all numbers are in thousands of dollars. be sure to read the whole problem before you jump in and get started. at the end of 1999 the firm had $43,000 in gross fixed assets. in 2000 they purchased an additional $14,000 of fixed asset equipment. accumulated depreciation at the end of 1999 was $21,000. the depreciation expense in 2000 is $4,620. at the end of 2000 the firm had $3,000 in cash and $3,000 in accounts payable. in 2000 the firm extended a total of $9,000 in credit to a number of their customers in the form of accounts receivable. the firm generated $60,000 in sales revenue in 2000. their cost of goods sold was 60 percent of sales. they also incurred salaries and wages expense of $10,000. to date the firm has $1,000 in accrued salaries and wages. they borrowed $10,000 from their local bank to finance the $15,000 in inventory they now have on hand. the firm also has $7,120 invested in marketable securities. the firm currently has $20,000 in long-term debt outstanding and paid $2,000 in interest on their outstanding debt. over the firm's life, shareholders have put up $30,000. eighty percent of the shareholder's funds are in the form of retained earnings. the par value per share of carolina business machines stock is

Which of the following is not a characteristic of a weak economy? a. a low employment rateb. a high inflation ratec. a decreased gdpd. a high unemployment rate

Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.