Mathematics for Business and Personal Finance

Chapter 19: Financial Management

Practice Tests

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% of the amount over $100,000. What is the federal corporate income tax?
A)$79,500.84
B)$61,250.00
C)$79,250.84
D)$95,199.00
2
The Law Offices of Webster, Tran, and Mendoza had a gross income of $1,375,000. Deductions totaled $550,000. For income over $335,000 but less than $10,000,000 the tax is $113,900 plus 34% of the amount over 335,000. What is the federal corporate tax?
A)$260,240
B)$280,500
C)$353,600
D)$467,500
3
Delgado Painting had a gross income of $230,900. They also had expenses during the year totaling $157,900. For income over $50,000 but less than $75,000 the tax is $7,500 plus 25% of the amount over $50,000. What is the federal corporate tax?
A)$13,250
B)$15,500
C)$18,250
D)$20,000
4
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% 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
5
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% 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
6
ALGEBRA Investment Bankers earned $325,000 commission for selling 1.2 million shares of The Santos Company stock. The commission was 5% of the value of the stock. Find the price of a share of the Santos Company stock.
A)$2.70
B)$5.00
C)$5.42
D)$5.61
7
Mega Mulch borrowed $50,000 from its bank to pay for new equipment. The bank loaned the money at 8% 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
8
Cup o' Joe borrowed $20,000 from its bank to pay for new equipment. The bank loaned the money at 6% 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
9
ALGEBRA The maturity value of a 5-year 7.5% ordinary interest commercial loan is $1,031,250. Find the principal.
A)$650,000
B)$725,000
C)$750,000
D)$825,000
10
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%. 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
11
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%. 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
12
The median sale price of a home in River Valley 5 years ago was $114,000. This year, the median sale price of a home in River Valley is $127,000. Find the inflation rate.
A)10.2%
B)11.4%
C)16.2%
D)89.7%
13
The price of a box of cookies 30 years ago was $0.35. This year, the price of the same box of cookies is $3.00. Find the inflation rate.
A)7.57%
B)11.67%
C)757.14%
D)857.00%
14
The price of a fast-food hamburger 30 years ago was $0.39. This year, the price of a fast-food hamburger is $0.99. Find the inflation rate.
A)6.1%
B)15.4%
C)60.6%
D)153.8%
15
A country has a Gross Domestic Product (GDP) of $983,500,000 and a population of 407,000. What is the per capita GDP?
A)$2,416.46
B)$4,070.83
C)$9,835.30
D)$20,325.68
16
A country has a Gross Domestic Product (GDP) of $1,213,000,000 and a population of 962,000. What is the per capita GDP?
A)$793.08
B)$1,260.91
C)$9,623.42
D)$12,609.10
17
A country has an inflation rate of 2.4% and a GDP of $985 million. What is the real GDP?
A)$961.36 million
B)$981.52 million
C)$961.35 billion
D)$981.52 billion
18
The current cost of a bicycle is $399. The cost in 1983 was $249. What is the CPI for the bicycle?
A)37.59
B)60.24
C)150.00
D)162.24
19
The current annual salary of a teacher is $34,500. The salary in 1989 was $29,500. What is the CPI for teachers' salaries?
A)14.49
B)16.95
C)114.49
D)116.95
20
The current cost of a ticket to a baseball game is $45.00. The cost in 1983 was $24.50. What is the CPI for the ticket?
A)54.44
B)183.67
C)205.00
D)836.70
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