Multiple Questions Answers

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