Which one of the following statements about business valuation is NOT true?

1. Which one of the following statements about business valuation is NOT true?

A. The value of a business changes over time.

B. There is a single value for any business.

C. There is no such thing as the value for a business

D. Actions by competitors also affect the value of a business.

2. Which ONE of the following is an indirect quote from an American perspective?

A. A??L0.5125/$
B. $0.006900/A??Y

C. $1.5637/Af?cAc€A!A?¬
D. A??Y115.23/Af?cAc€A!A?¬

3. The bid quote represents the rate at which

A. the dealer will buy foreign currency from you.
B. the dealer will sell foreign currency to you.

C. you can buy the foreign currency from the dealer.

D. None of the above

4. Accounting rate of return (ARR): Stump Storage Co. is expecting to generate after-tax income of $155,708, $159,312, and $161,112 for each of the next three years. The equipment used will have an average book value of $251,575 over that period. What is the ARR?

A. 65.7% B. 69.4% C, 63.1% D. 66.8%

5. Strange Manufacturing Company is purchasing a production facility at a cost of $21 million. The firm expects the project to generate annual cash flows of $7 million over the next five years. Its cost of capital is 18 percent.

Net present value: What is the net present value of this project?

A. $890,197

B. $1,213,909

C. $905,888

D. $777,713

6. The cost of debt: PackMan Corporation has bonds outstanding with nine years to maturity and are currently priced at $754.08. If the bonds have a coupon rate of 7.25 percent, then what is the after-tax cost of debt for Beckham if its marginal tax rate is 30 percent? Complete the calculation as is done on Wall Street.

A. 7.050%
B. 8.225%

C. 11.750%
D. 12.095%