A. capital structure - The area of finance that deals with long-term investment decisions and known as C. norking capital management C. financial strategy D. capital budgeting 8. The true owners of the corporation are the A. holders of debt issues of the firm B. preferred stockholders C. board of directors of the firm D. common stockholders 9. Assume the total cost of university education will be e290,000 when your child enters college in 18 years. You currently have UND40,000 to invest. What annual rate of interest must you earn on your im investment to cover the cost your child's university education? A. 10.50 B.13.87 C. 11.63 D.7.36 10. You're trying to save to buy a new UND170,000 Ferrari. You have UND40,000 oday that can be invested aty The bank pays 5 percent annual interest on its accounts. How long will it be before you have enough to bu car? A. 24.81 B.18.42 C. 29,66 D. 21.37

1. The correct answer is D. capital budgeting. Capital budgeting is the area of finance that deals with long-term investment decisions.<br /><br />2. The correct answer is D. common stockholders. Common stockholders are the true owners of a corporation as they hold the common shares of the company.<br /><br />3. To find the annual rate of interest required to cover the cost of your child's university education, you can use the formula for compound interest: <br /><br />\[ A = P(1 + r)^n \]<br /><br />Where:<br />- \( A \) is the future value of the investment (cost of education)<br />- \( P \) is the present value of the investment (current amount you have)<br />- \( r \) is the annual interest rate<br />- \( n \) is the number of years<br /><br />Plugging in the values:<br /><br />\[ 290,000 = 40,000(1 + r)^{18} \]<br /><br />Solving for \( r \), we get:<br /><br />\[ r \approx 0.1136 \]<br /><br />So, the annual rate of interest required is approximately 11.36%, which is closest to option C. 11.63.<br /><br />4. To find out how long it will take to save enough to buy the Ferrari, you can use the formula for compound interest:<br /><br />\[ A = P(1 + r)^n \]<br /><br />Where:<br />- \( A \) is the future value of the investment (cost of the Ferrari)<br />- \( P \) is the present value of the investment (current amount you have)<br />- \( r \) is the annual interest rate<br />- \( n \) is the number of years<br /><br />Plugging in the values:<br /><br />\[ 170,000 = 40,000(1 + 0.05)^n \]<br /><br />Solving for \( n \), we get:<br /><br />\[ n \approx 29.66 \]<br /><br />So, it will take approximately 29.66 years to save enough to buy the Ferrari, which is closest to option C. 29.66.