University of Western Australia

An Australian company paying a 30% company tax rate pays a fully franked dividend of $1.40 per share with an imputation credit of $0.60 per share attached. If an Australian investor with a marginal tax rate of 40% (including Medicare Levy) receives this, how much additional personal tax would an Australian taxpayer pay? A None of these responses B $0.56 C $0.60 D $0.80

You are borrowing money to buy a car. If you can make payments of $300 per month starting one month from now at an interest rate of 4%, how much will you be able to borrow for the car today if you finance the amount over four years? $6 358.54 $13 286.65 $13 067.62 $15 587.88

Which of the following best describes the annual percentage rate? A the discount rate when compounded more than once a year or less than once a year B the quoted interest rate which considered with the compounding period gives the effective interest rate C the discount rate when it is divided by the number of times it is compounded in a year D the effective annual rate after compounding is taken into account

A lottery winner will receive $1 million at the end of each of the next ten years. What is the present value (PV) of her winnings at the time of her final payment, given that the interest rate is 8.75% per year? $6.49 million $6.94 million $7.96 million $6.56 million

A lottery winner will receive $1 million at the end of each of the next ten years. What is the present value (PV) of her winnings at the time of her final payment, given that the interest rate is 8.75% per year? A $6.49 million B $6.94 million C $7.96 million D $6.56 million

Steve is offered an investment where for every $1.00 invested today, he will receive $1.10 in five years' time. Steve concludes that in five years' time he will have $1.10 for every $1.00 invested and that this investment will increase his personal value. What is Steve's major error in reasoning when making this decision? There may be other investments that he can make that will offer even bigger benefits   The investment may have hidden costs that will reduce the amount of benefit he receives.   The value of the cash he has today is greater than the value of the cash he may have in the future.   Costs and benefits must be in the same terms to be compared.