Mathematics with Business Applications

Chapter 22:

Practice Test

1.
The Steakhouse had a gross income of $590,256 for the year. Deductions totaled $344,100. The federal corporate income tax for taxable income is as follows: For income over $100,000 but less than $335,000, the tax is $22,500 plus 39 percent of the amount over $100,000. What is the federal corporate income tax?
A)$19,794.40
B)$61,250.00
C)$79,250.84
D)$95,199.00
2.
M & P Grocery wants to open a new location. To finance the expansion, M & P plans to sell an issue of 100,000 shares of stock at $25 per share. The underwriting commission will be 5 percent of the value of the stocks. Accounting fees, legal fees, printing costs, and other expenses are estimated to be $67,000. If all the shares of stock are sold, what net proceeds will M & P receive?
A)$192,000
B)$564,387
C)$124,897
D)$2,308,000
3.
Mega Mulch borrowed $50,000 from its bank to pay for new equipment. The bank lent the money at 8 percent ordinary interest for 180 days. What is the maturity value of the loan?
A)$52,000
B)$54,000
C)$56,000
D)$58,000
4.
The financial manager of Chain Sawz decided to invest the company's surplus cash in a $50,000 U.S. Treasury bill for 180 days. The interest rate is 5 percent. The bank charges a service fee of $25 to obtain the Treasury bill. What is the cost of the Treasury bill?
A)$48,725
B)$48,750
C)$48,775
D)$48,800
5.
Ed's Appliances has a $100,000 cash surplus. Ed used the cash to invest in commercial paper (CP) issued by Mobile Electric at 6 percent for 60 days. The bank charges a service fee of $25. What is the cost of the CP?
A)$93,975
B)$94,025
C)$98,975
D)$99,025
6.
For M & P Grocery's expansion, it had the following growth expenses: land is $45,000; construction costs are $1,500,000; architect's fee is 6 percent of construction costs; surfacing parking lot is $4 per square foot for 40,000 square feet; legal fees are $15,000; equipment and fixtures are $225,000; and store stock is $80,000. What is the total cost of the the expansion?
A)$2,035,000
B)$2,115,000
C)$2,106,000
D)$2,146,500
7.
Cup o' Joe borrowed $20,000 from its bank to pay for new equipment. The bank lent the money at 6 percent ordinary interest for 90 days. What is the maturity value of the loan?
A)$20,090
B)$20,300
C)$20,600
D)$21,200
8.
The financial manager of National Auto Parts decided to invest the company's surplus cash in a $150,000 U.S. Treasury bill for 120 days. The interest rate is 6 percent. The bank charges a service fee of $50 to obtain the Treasury bill. What is the cost of the Treasury bill?
A)$147,050
B)$147,950
C)$153,950
D)$158,950
9.
Reel Records has a $150,000 cash surplus. The financial manager used the cash to invest in CP issued by American Electric at 6 percent for 90 days. The bank charges a service fee of $50. What is the cost of the CP?
A)$147,650
B)$147,800
C)$152,250
D)$158,950
10.
National Auto Parts wants to open a warehouse. To finance its expansion, National Auto Parts plans to sell an issue of 50,000 shares of stock at $25 per share. The underwriting commission will be 5 percent of the value of the stocks. Accounting fees, legal fees, printing costs, and other expenses are estimated to be $24,000. If all the shares of stock are sold, what net proceeds will National Auto Parts receive?
A)$524,000
B)$601,000
C)$1,163,500
D)$1,226,000
Glencoe Online Learning CenterBusiness Administration HomeProduct InfoSite MapContact Us

The McGraw-Hill CompaniesGlencoe

Please read our Terms of Use and Privacy Policy before you explore our Web site. To report a technical problem with this Web site, please contact the Web Producer.