# Expert Answers

1. What is the net price equivalent rate of 9/15/18?

A. .36573

B. .63427

C. .63573 ac

D. .36427

2. A video game sells at Arnolds for $14.99. Arnold's marks the game up at 40% of the selling price. What is the cost of the game to Arnold?

A. $8.99

B. $9.10

C. $6.50

D. $6.00

3 Depreciation expense in the declining-balance method is calculated by the depreciation rate

A. divided by book value at beginning of year.

B. times accumulated depreciation at year end.

C. plus book value at end of year.

D. times book value at beginning of year.

4 Cost of merchandise sold equals beginning inventory

A. minus net purchases minus ending inventory.

B. plus net purchases minus ending inventory.

C. plus net purchases plus ending inventory.

D. minus net purchases plus ending inventory.

5 Use the following information and the tables in the Business Math Handbook that accompanies the course textbook to answer the question.

$140.10 per month

Cash price: $5,600

Down payment: $0

Cash or trade months with bank-approved credit; amount financed: $5,600

Finance charge: $2,806

Total payments: $8,406

What is the APR by table lookup?

A. 17.00%–17.25%

B. 16.75%–17.00%

C. 17.25%–17.50%

D. 16.50%–16.75%

6 A truck costs $35,000 with a residual value of $2,000. Its service life is five years. Using the declining-balance method at twice the straight-line rate, the book value at the end of year 2 is

A. $22,000.

B. $12,600.

C. $35,000.

D. $33,000.

7 At the beginning of each year, Bill Ross invests $1,400 semiannually at 8% for nine years. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the cash value of the annuity due at the end of the ninth year.

A. $37,339.68

B. $37,939.86

C. $38,739.68

D. $37,399.68

8 In calculating the daily balance, cash advances are

A. always added in.

B. always subtracted out.

C. sometimes subtracted out.

D. sometimes added in.

9 Joe Sullivan invests $9,000 at the end of each year for 20 years. The rate of interest Joe gets is 8% annually. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the final value of Joe's investment at the end of the 20th year on this ordinary annuity.

A. $411,588.00

B. $88,362.90

C. $411,858.00

D. $88,632.90

10. Depreciation expense is located on the

A. the accounts payable documentation.

B. the accounts receivable documention.

C. balance sheet.

D. income statement

11Using the tables in the Business Math Handbook that accompanies the course textbook, determine the difference between the monthly payments on a $120,000 home at 61⁄2% and at 8% for 25 years.

A. $91.12

B. $115.20

C. $81.12

D. $151.02

12The average daily balance is equal to the sum of daily balances

A. divided by number of days in billing cycle.

B. minus number of days in billing cycle.

C. plus number of days in billing cycle.

D. multiplied by number of days in billing cycle.

13 Calculate the optional bodily injury cost for the following:

Class: 10

Optional Bodily Injury: 100/300/50

A. $144

B. $94

C. $108

D. $187

14 Which one of the following statements is true of preferred stock?

A. It can be cumulative.

B. It never has a preference to dividends over common stockholders.

C. It has equal rights to common stock.

D. It never receives dividends in arrears

15 Which one of the following statements is true about reduced paid-up insurance?

A. It means the original face amount is continued for a certain number of years.

B. It continues for 20 years.

C. It buys protection with paying new premiums.

D. It results in a face amount less than the original amount

16 The municipality of Waterloo needs $915,000 from property tax to meet its budget. The total value of assessed property in Waterloo is $14,000,000. What is the tax rate per dollar? (Round your answer to the nearest thousandth.)

A. $.071

B. $.065

C. $.07

D. $.0655

17 Matt Miller, age 28, takes out $50,000 of straight-life insurance. His annual premium is $418.20. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the cash value of his policy at the end of 20 years.

A. $26,000

B. $30,000

C. $26,500

D. $13,250

18 The weighted-average method is best used

A. only for grains.

B. only for fuels.

C. for homogeneous products.

D. for heterogeneous products.

A. .36573

B. .63427

C. .63573 ac

D. .36427

2. A video game sells at Arnolds for $14.99. Arnold's marks the game up at 40% of the selling price. What is the cost of the game to Arnold?

A. $8.99

B. $9.10

C. $6.50

D. $6.00

3 Depreciation expense in the declining-balance method is calculated by the depreciation rate

A. divided by book value at beginning of year.

B. times accumulated depreciation at year end.

C. plus book value at end of year.

D. times book value at beginning of year.

4 Cost of merchandise sold equals beginning inventory

A. minus net purchases minus ending inventory.

B. plus net purchases minus ending inventory.

C. plus net purchases plus ending inventory.

D. minus net purchases plus ending inventory.

5 Use the following information and the tables in the Business Math Handbook that accompanies the course textbook to answer the question.

$140.10 per month

Cash price: $5,600

Down payment: $0

Cash or trade months with bank-approved credit; amount financed: $5,600

Finance charge: $2,806

Total payments: $8,406

What is the APR by table lookup?

A. 17.00%–17.25%

B. 16.75%–17.00%

C. 17.25%–17.50%

D. 16.50%–16.75%

6 A truck costs $35,000 with a residual value of $2,000. Its service life is five years. Using the declining-balance method at twice the straight-line rate, the book value at the end of year 2 is

A. $22,000.

B. $12,600.

C. $35,000.

D. $33,000.

7 At the beginning of each year, Bill Ross invests $1,400 semiannually at 8% for nine years. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the cash value of the annuity due at the end of the ninth year.

A. $37,339.68

B. $37,939.86

C. $38,739.68

D. $37,399.68

8 In calculating the daily balance, cash advances are

A. always added in.

B. always subtracted out.

C. sometimes subtracted out.

D. sometimes added in.

9 Joe Sullivan invests $9,000 at the end of each year for 20 years. The rate of interest Joe gets is 8% annually. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the final value of Joe's investment at the end of the 20th year on this ordinary annuity.

A. $411,588.00

B. $88,362.90

C. $411,858.00

D. $88,632.90

10. Depreciation expense is located on the

A. the accounts payable documentation.

B. the accounts receivable documention.

C. balance sheet.

D. income statement

11Using the tables in the Business Math Handbook that accompanies the course textbook, determine the difference between the monthly payments on a $120,000 home at 61⁄2% and at 8% for 25 years.

A. $91.12

B. $115.20

C. $81.12

D. $151.02

12The average daily balance is equal to the sum of daily balances

A. divided by number of days in billing cycle.

B. minus number of days in billing cycle.

C. plus number of days in billing cycle.

D. multiplied by number of days in billing cycle.

13 Calculate the optional bodily injury cost for the following:

Class: 10

Optional Bodily Injury: 100/300/50

A. $144

B. $94

C. $108

D. $187

14 Which one of the following statements is true of preferred stock?

A. It can be cumulative.

B. It never has a preference to dividends over common stockholders.

C. It has equal rights to common stock.

D. It never receives dividends in arrears

15 Which one of the following statements is true about reduced paid-up insurance?

A. It means the original face amount is continued for a certain number of years.

B. It continues for 20 years.

C. It buys protection with paying new premiums.

D. It results in a face amount less than the original amount

16 The municipality of Waterloo needs $915,000 from property tax to meet its budget. The total value of assessed property in Waterloo is $14,000,000. What is the tax rate per dollar? (Round your answer to the nearest thousandth.)

A. $.071

B. $.065

C. $.07

D. $.0655

17 Matt Miller, age 28, takes out $50,000 of straight-life insurance. His annual premium is $418.20. Using the tables in the Business Math Handbook that accompanies the course textbook, determine the cash value of his policy at the end of 20 years.

A. $26,000

B. $30,000

C. $26,500

D. $13,250

18 The weighted-average method is best used

A. only for grains.

B. only for fuels.

C. for homogeneous products.

D. for heterogeneous products.

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