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W05 11am mt1

# W05 11am mt1 - Anderson Econ 136A 11:00 class Midterm#1...

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January 31, 2005 Anderson Econ 136A 11 :00 class Midterm #1 Name _________________________ Write your name and perm number on your green scantron and your blue- book. Complete the multiple choice on your green scantron and the problems in the blue book . ------------------------- Complete on your green scantron. 1. Ed Sloan wants to withdraw \$25,000 (including principal) from an investment fund at the end of each year for five years. How should he compute his required initial investment at the beginning of the first year if the fund earns 10% compounded annually? a. \$25,000 times the future value of a 5-year, 10% ordinary annuity of 1. b. \$25,000 divided by the future value of a 5-year, 10% ordinary annuity of 1. c. \$25,000 times the present value of a 5-year, 10% ordinary annuity of 1. d. \$25,000 divided by the present value of a 5-year, 10% ordinary annuity of 1. 2. Which of the following is a limitation of the balance sheet? 3. Which of the following items is not presented on a "net of tax" basis in the financial statements? 4. Present value is 5. The basis for classifying assets as current or noncurrent is conversion to cash within a. the accounting cycle or one year, whichever is shorter. b. the operating cycle or one year, whichever is longer. c. the accounting cycle or one year, whichever is longer. d. the operating cycle or one year, whichever is shorter.

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Midterm #1--Page 2 6. The financial statement which summarizes operating, investing, and financing activities of an entity for a period of time is the 7. When converting from cash basis to accrual basis accounting, which of the following adjustments should be made to cash receipts from customers to determine accrual basis service revenue? 8. The statement "risk is commensurate with reward" means that the higher the perceived risk, the:
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W05 11am mt1 - Anderson Econ 136A 11:00 class Midterm#1...

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