Acme Corp. purchased a new stamping machine for $100000, paid $10000 for shipping, and paid $ 5000 to have it installed in their plant. Based on an estimated salvage value of $ 25000 and an economic life of six years, the-difference between straight-line depreciation and double-declining balance depreciation in the second year of the asset’s life is closest to:()
A. $15000.
B. $16666.
C. $10556.
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All of the following are poor examples of supervisory responsibility EXCEPT:()
A. Proper supervision is not exercised because the supervisor’s income is partially based on unsupervised or improper trading activity.
B. Poor procedures allow a portfolio manager to designate a trade to an account or portfolio after the outcome of the trade is known.
C. Incorporating a professional conduct evaluation as part of an employee’s performance review.
Ron’s Organic Markets has limited access to borrowed funds and must choose among several independent projects with returns greater than their cost of capital. All the projects under consideration have the same required investment of $ 2 million and Ron’s has $10 million available for capital investments this year. Which of the following selection criteria is least likely to produce the optimal five projects for investment Choose the five projects with:()
A. the greatest total NPV.
B. the largest sum of profitability indexes.
C. the highest IRRs.
An analyst meets with a new client. During the meeting, the analyst sees that the new client’s portfolio is heavily invested in one over-the-counter stock. The analyst has been following the stock and thinks it will perform well in the long run. The analyst arranges through a brokerage firm to simultaneously sell a large number of shares of the stock via a series of cross trades from the new client’s portfolio to various existing clients. He arranges the trades to be executed at a price that approximates the current market price. This action is:()
A. not in violation of the Standards.
B. a violation of Standard Ⅲ (A), Loyalty, Prudence, and Care.
C. a violation of Standard Ⅲ (B), Fair Dealing.
Consider a floating rate issue that has a coupon rate that is reset on January 1 of each year. The coupon rate is defined as one-year London Inter-bank Offered Rate (LIBOR) + 125 basis points and the coupons are paid semi-annually. If the one-year LIBOR is 6.5 percent on January 1, which of the following is the semi-annual coupon payment received by the holder of the issue in that year()
A. 3.250%.
B. 6.500%.
C. 3.875%.