the last monthly payment will be interest, and a larger propor | Information Science and Technology

the last monthly payment will be interest, and a larger proportion
will be principal, than for the first monthly payment.
C. The total dollar amount of principal being paid off each month gets smaller as the loan
approaches maturity.
D. Exactly 10% of the first monthly payment represents interest.
Page 23 of 25
37. Mr. x is going to receive $10,000 six years from now. Mr. y is going to receive $10,000 nine
years from now. Which one of the following statements is correct if both Mr. x and Mr. y apply a
12 percent discount rate to these amounts?
A. The present values of Mr. x and Mr. y money are equal.
B. In future dollars, Mr. y money is worth more than Mr. x ' money.
C. In today's dollars, Mr. x ' money is worth more than Mr. y.
D. Mr. y money is worth more than Mr. x money given the 7 percent discount rate.
38. Walker & Son is issuing a 10-year, $1,000 par value bond that pays 9% interest annually.
The bond is expected to sell for $885. What is Walker & Son's after-tax cost of debt if the firm is
in the 34% tax bracket? Approximate to the nearest figure
A. 7.11% B. 8.01% C. 9.15% D. 10.35%
39. Which of the following reasons causes bonds to be a less expensive form of capital for a
public firm than the issuance of common stock? Bondholders:
A. bear less risk than common stockholder‟s bear.
B. have prior voting rights over common stockholders.
C. receive greater returns than common stockholders.
D. investors pay a lower tax rate on bond interest
40. ABC co. is expected to pay an annual dividend of $0.80 a share next year. The market price
of the stock is $22.40 and the growth rate is 5 percent. What is the firm's cost of equity?
A.7.58 percent B.7.91 percent C.8.24 percent D.8.57 percent
Page 24 of 25
UNITY UNIVERSITY
DEPARTMENT OF ACCOUNTING AND FINANCE
ADAMA CAMPUS
MODEL EXAM
Name: ID. No: Section
ANSWER SHEETS.
Booklet No 1 Fundamentals of Accounting I
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
Booklet No 2 Intermediate Financial Accounting I
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
Booklet No 3 Cost and Management Accounting I
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
31. 32. 33. 34. 35. 36. 37. 38. 39. 40.
Page 25 of 25
Booklet No 4 Financial Managements I
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
31. 32. 33. 34. 35. 36. 37. 38. 39. 40