Multiple choice

1) An item which may be converted to cash within one year or one operating cycle of the firm is classified as a 

A)current liability. 

B)long-term asset. 

C)current asset. 

D)long-term liability. 

2) Which of the following is not a primary source of capital to the firm? 

A) assets 

B)common stock 

C)preferred stock 

D)bonds 

3) The residual income of the firm belongs to 

A)creditors. 

B)preferred stockholders. 

C)common stockholders. 

D)bondholders. 

4) A person signs a contract calling for payments of $250,000 per year, to begin 10 years from now.  To find the present value of this contract, which table or tables should you use? 

A)the future value of $1 

B)the future value of an annuity of $1 and the future value of $1 

C)the present value of an annuity of $1 and the present value of $1 

D)none of the above