Busi 101 Homework TAPQ, TF, MC, P1 and 2TAPQAn investor purchases shares on 1/1/1 for $500.00. During the year, annual dividends of $13.00 per share were declared and paid. The market price of the stock on 12/31/1 is $527.00. What is the investor’s return for the year?An investor purchases shares on 1/1/1 for $700.00. During the year, quarterly dividends of $8.50 per share were declared and paid. The market price of the stock on 12/31/1 is $673.00. What is the investor’s return for the year?True or False1. __F__ Financial accounting information is generated primarily to help with decisions made inside a business or by some other organization.2. __F__ Typically, a business operated as a sole proprietorship will be able to raise money from issuing capital shares easier than will a business operated as a corporation.3. __F__ Employees have no reason to be interested in any financial accounting information provided by theiremployer.4. __F__ Most investors in the capital stock of a business want to be involved in the daily operations.5. __T__ The board of directors of a corporation is elected by its shareholders.6. __T__ Investors who hold investments in capital stock for longer than a year may enjoy a tax benefit.7. __F__ In analyzing a business, creditors are most interested in the possibility that the corporation’s stock price might decline.8. __F__ Corporations that report earning additional profits are required by law to pay dividends to their shareholders.9. __T__ Purchasing the capital stock of a business is typically a riskier investment than opening a savings account.10. __T__ Financial information is communicated in monetary terms but may be explained verbally.11. __T__ Most businesses report their financial accounting information as part of an annual report released to owners and other interested parties.12. __F__ Accountants are the primary users of the information provided by financial accounting.13. __F__ An entity that loans money to a business is referred to as a “shareholder.”Multiple Choice1. Ramon Sanchez is a loan officer at Washington Bank. He is in the process of deciding whether or not to loan money to Medlock Corporation. Which of the following would have the most influence on Sanchez when making this decision?1. *Medlock generated positive cash flows last year.2. Medlock paid dividends last year.Jessica Hujber8/22/14Busi 1013. Medlock’s stock price increased last year.4. The number of stockholders in Medlock increased last year.2. Which of the following is not a reason for an investor to purchase capital stock in a relatively large corporation?1. To receive dividend payments2. To sell the stock for a gain if the share price increases3. To earn a return on their investment4. *To participate in the day-to-day operations of the business3. Which of the following is not a decision that is normally made using financial accounting information?1. An investor decided to acquire shares of the capital stock of Rayburn Corporation.2. A credit analyst at Mayfield Corporation rejected a request for credit from Rayburn Corporation.3. *A Rayburn Corporation manager decided to increase the quantity of widgets produced each month for sales purposes.4. A loan officer at Fairburn Bank chose to grant a loan request made by Rayburn Corporation so the company could expand.4. Which of the following individuals is most likely to have a say in the policy decisions made by a large corporation?1. A stockholder2. *A member of the board of directors3. An employee4. A creditor5. Leon Williams is an investor in Springfield Corporation. On January 1, Year One, he purchased 150 shares of the corporation’s capital stock at a price of $45 per share. On October 15, Year One, Springfield distributed a cash dividend of $1.50 per share to its stockholders. On December 31, Year One, Springfield’sstock is selling for $47 per share. What is the annual rate of return on William’s investment during Year One, rounded to one decimal point?1. 3.3 percent2. 4.4 percent3. 5.5 percent4. *7.8 percent6. At the beginning of the current year, the capital stock of the Ajax Corporation was selling for $24 per share,but, by the end of the year it was selling for $35 per share. Which of the following individuals is the least likely to pay significant attention to this jump in stock price?1. The vice president in charge of advertising working on the budget for this coming year2. *The loan officer at the bank who granted Ajax a loan late last year3. Chair of the board of directors4. Head of a local investment advisory company7. Which of the following is least likely to be found in the financial information provided in the annual report of a large corporation?1. The amount of cash dividends paid in each of the last three years.2. The total amount of debt owed by the corporation.3. *The rationale for deciding to rent a new airplane rather than buying it.4. The amount of cash held by the business at the end of the year.8. William Alexander invests money to become one of the owners of a local restaurant. He sells his interest three months later because he wants to invest in a bookstore. Which is the most likely legal structure for therestaurant?1. Sole proprietorship2. *Partnership3. Standard operating business4. CorporationProblems 1 and 2- Explain how each of the following individuals might use the information provided by financial accounting about the Nguyen Company, which is located in Falls Church, Virginia.1. Bank loan officer considering loaning money to Nguyen CompanyThe loan officer might use the financial information to determine the chances that the money will be there in to future to pay debts.2. Current employee of Nguyen CompanyWould care about whether the company is doing well according to the information since they may get bigger pay raises or end of the year bonus. They should also care if the company is doing poorly since then they can predict perhaps getting laid off, reductions in resources, or pay cuts.3. Potential employee of Nguyen CompanyThe information is useful to a potential employee since then that person can see whether they have a future at the company or not. If things are positive then the person is more likely to apply for a job since they mayget a raise and have a stable job. If things are negative then the person is less likely to apply since there is a greater chance of getting a pay cut or being laid off.4. Current investor in Nguyen CompanyThe current investor would