Review Questions (WK7)

Review Questions (WK7) - WEEK 7 REVIEW QUESTIONS 1. Quiz...

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1 WEEK 7 REVIEW QUESTIONS 1. Quiz Company has a 12 year lease, with payments of $250,000 made at the beginning of each year. If no purchase option exists, and the company is in the 40% tax bracket, what is the annual after-tax cash outflow on the lease? (Points: 1) $416,667 $250,000 $150,000 $100,000 2. Contract terms that specify things a borrower "must"do are referred to as (Points: 1) instructive covenants informative covenants negative covenants positive covenants 3. A balloon payment is (Points: 1) payment made on circus debt. a large front-end debt payment, followed by smaller payments. a large lump-sum payment at maturity of a debt. none of the above. 4. The yield curve's typical shape suggests (Points: 1) short term debt will carry higher interest rates than long term debt. short term debt will carry about the same rates as long term debt. short term debt will carry lower rates than long term debt. nothing about the differences in rates due to maturity difference.
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Review Questions (WK7) - WEEK 7 REVIEW QUESTIONS 1. Quiz...

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