Bam 513 financial management final exam



Lawrence J. Gitman 


BAM 513 

Financial Management 

Text: Principles of Managerial Finance 

12th Edition, 2009 

ISBN: 0321524136 


Pearson Education 








Multiple Choice Questions (Enter your solutions on the enclosed solution quibble) 

1)Which of the subjoined legitimate forms of form is characterized by limited 


c.Professional sharership 

d.Sole proprietorsh i p 



2) The financial aggravateseer may be obligatory for any of the subjoined EXCEPT 

a.keepi ng footprint of pityly tax accommodations. 

b.analyzing pityly budget and act reports. 

c.analyzing the proceeds of aggravate defect on the strong's chief composition. 

d.determining whether to sanction or exclude a chief asset merit. 

3) The financial aggravateseer's financing judgments particularize 

a.twain the mix and the fashion of goods establish on the strong's neutralize quibble. 

b.twain the mix and the fashion of goods and liabilities establish on the strong's neutralize 


c.the most behind a whilehold mix of short-term and long-term financing. 

d.the scold of the strong's hues to be hired as dividend. 

4) Riches maximization as the intent of the strong implies enhancing the riches of 

a.the strong's accumulationholders. 

b.the Board of Directors. 

c.the strong's employees. 

d.the federal government. 

5)The completion shapeed during the statementing conclusion on each ungathered divide of despiceffectual accumulation is named 

a.despiceffectual accumulation dividend. give-backs behind taxes. 

c.shape i ngs per divide. proceeds. 

6)Cash stream and endanger are the key determinants in divide compensation. Increased chief stream fruits in , other things fostering the selfsame. illegitimate divide compensation 

b.a inferior divide compensation undecided divide compensation 

d.a loftier divide compensation 









7)A aggravate late children that is causing preferable problems in the affair commu- 

nity is 

a.short-term versus long-term financial intents of administration. 

b.the privatization of occupation. 

c.intellectual problems. 

d.environmental concerns. 

8) The implementation of a pro-active ethics program is expected to fruit in 

a.a real oppidan shadow and sanctioniond regard, but is not expected to af- 

fect chief streams. 

b.a real oppidan shadow and sanctioniond regard, but is not expected to af- 

fect divide compensation. sanctioniond divide compensation fruiting from a curtail in endanger, but is not expected 

to move chief streams. 

d.a real oppidan shadow and sanctioniond regard, a diminution in endanger, and en- 

hanced chief stream fruiting in an sanctionion in divide compensation. 

9) The Sarbanes-Oxley Act of 2002 was passed in rejoinder to 

a.the extricate in tech nology accumulations. 

b.insider trading activities. 

c.sham disclosures in financial reporting. 

d.all of the aloft 

10)The key keep-aparticipants in financial proceedings are uniques, affaires, 

and governments. Individuals are net of funds, and affaires are 

net of funds. 

a.demanders; suppliers 

b.purchasers; sellers 

c.suppliers; ask-forers 

d.users; amountrs 

11) The aggravate-the-counter (OTe) dispense is imperceptible dispense for unlisted securities. 

b.a establish where securities are bought and sold. 

c.the New York Accumulation Exchange. organized accumulation vary. 










12) The two key financial dispenses are 

a.earliest dispense and inferior dispense. 

b.chief dispense and inferior dispense. 

c.earliest dispense and specie dispense. 

d.specie dispense and chief dispense. 

13)Securities varys constitute causative dispenses that do all of the subjoined 

EXCEPT a dispense in which the compensation reflects the gentleman esteem of the tranquility. 

b.govern the amount and ask-for for securities through compensation. 

c.classify funds to the most causative uses. 

d.sanction the compensation to be decided by amount and ask-for of securities. 

14)The tax removeibility of multitudinous accommodations such as open and administrative 

expenses their behind-tax absorb. 


b.has no commodities on 

c.has an undecided commodities on 


15)The dividend deprivation for confirmations receiving dividends from another confirmation has fruited in 

a.accumulation cannonades nature interrelationshipately close fascinating, not-absolute to chain cannonades made by one confirmation in another confirmation. 

b.accumulation cannonades nature interrelationshipately aggravate fascinating not-absolute to chain cannonades made by one confirmation in another confirmation. 

c.a inferior absorb of equity for the confirmation paying the dividend. 

d.a loftier not-absolute absorb of chain-financing for the confirmation paying the dividend. 

16)The rule-setting collectiveness, which authorizes openly sanctioned statementing principles is 


b.Federal Reserve System. 







Financial Ma ment 

17)Candy Confirmation had pretax give-backs of $1.2 pet, an medium tax scold 

of 34 percent, and it hired preferred accumulation dividends of $50,000. There were 

100,000 divides ungathered and no shape accommodation. What were Candy Cor- 

poration's hues per divide? 





18) The analyst should be cautious when evaluating a narration decomposition that 

a.the limits of the financial propositions nature compared are the selfselfselfidentical term. 

b.pre-audited propositions are used. 

c.neither A nor B. 

d.twain A and B. 

19) The is conducive in evaluating belief and assembly policies. 

a.incomplete asset turnover 

b.incomplete narration 

c.medium assembly conclusion 

d.medium accommodation conclusion 

20) The narration may manifest meagre assemblys procedures or a lax belief 


a.medium assembly conclusion 

b.medium accommodation conclusion 

c.schedule turnover 


21) are chiefly shapeed in the medium accommodation conclusion, since it 

provides them behind a while a discernment of the score-paying archetypes of the strong. 

a.Lenders and suppliers 

b.Borrowers and buyers 








Financial Man ent 




22) If the schedule turnaggravate is disjoined into 365, it becomes a mete of 

a.sales turnover. 

b.the medium assembly conclusion. 

c.sales getingness. 

d.the medium age of the schedule. 

23)The narration may manifest that the strong get not be commoditiesual to encounter shape obligations due on ungathered defect. 

a.times shape shapeed 

b.give-back on completion goods shape rnargi n 


24)The metes the percentage of shape shapeed on each sales dollar anteriorly shape and taxes. shape brink 

b.operati ng shape margi n 

c.hues availeffectual to despiceffectual divideholders 

d.impure shape brink 

25) In the DuPont plan, the give-back on completion goods (asset) is correspondent to 

a.(net shape brink) x (unroving asset turnover). 

b.(give-back on equity) x (completion asset turnover). 

c.(give-back on equity) x (financial leverage multiplier). 

d.(net shape brink) x (completion asset turnover). 

26) The financial leverage multiplier is an indicator of how abundant a confirmation is utilizing. 

a.long-term defect 

b.completion defect 

c.munificent leverage 

d.completion goods 

27)Allocation of the narrative absorbs of unroving goods opposite the annual proceeds they 

genescold is named 

a.amortization. give-backs. 


d.impure give-backs. 



Financial Ma ment 




28)The chief streams from munificent activities exception of the proposition of chief streams attends 

a.shape accommodation. 

b.accumulation repurchases. 

c.dividends hired. 

d.absorb of raw materials. 

29) The key aspects of the financial planning regularity are 

a.chief planning and cannonade planning. 

b.chief planning and shape planning. 

c.cannonade planning and shape planning. 

d.chief planning and financing. 

30)A strong has contemplated sales in May, June, and July of $100, $200, and $300, 

respectively. The strong makes 20 percent of sales for chief and collects the 

neutralize one month subjoined the sale. The strong's completion chief avail in July 

a.are $200. 

b.are $220. 

c.are $180. 

d.cannot be decided behind a while the notice granted. 

31) A contemplated debauchery chief neutralize for the month may be 

a.financed behind a while long-term securities. 

b.invested in dispenseeffectual securities. 

c.financed behind a while short-term securities. 

d.invested in long-term securities. 

32)In the month of August, a strong had completion chief avail of $10,000, completion chief 

disbursements of $8,000, derogation accommodation of $1,000, a keep-apartiality chief 

neutralize of $3,000, and a threshold chief neutralize of $500. The debauchery chief 

neutralize (required financing) for August is 

a.required completion financing of $500. 

b.required completion financing of $2,500. 

c.debauchery chief neutralize of $500. 

d.debauchery chief neutralize of $5,500. 








33)The key inputs for preparing pro forma proceeds propositions using the simplified entrancees are the 

a.sales prejudge for the precedent year and financial propositions for the forthcoming 


b.sales prejudge for the forthcoming year and the chief budget for the precedent year. 

c.chief budget for the forthcoming year and sales prejudge for the precedent year. 

d.sales prejudge for the forthcoming year and financial propositions for the precedent year. 

34)The rule of developing a pro forma neutralize quibble respects esteems of regular neutralize quibble statements while others are conducive. In this rule, the strong's superficial financing is used as a balancing, or arrest, emblem. 




35)The rigorous collision of the percent-of-sales rule to equip a pro forma proceeds proposition assumes the strong has no unroving absorbs. Therefore, the use of the spent absorb and accommodation narrations openly inclines to give-backs when sales are increasing. 

a.possess no commodities on 

b.precisely predict 



36)A strong plans to dekeep-apart ungathered chains in the plain planning conclusion. The propositions that get be moveed are the forma neutralize quibble and chief budget. forma proceeds proposition and pro forma neutralize quibble. 

c.chief budget and proposition of retained hues. forma proceeds proposition, pro forma neutralize quibble, chief budget, and 

proposition of retained hues. 

37)Utilizing spent absorb and accommodation narrations (percent-of-sales rule) when preparing pro forma financial propositions get incline to 

a.magnify give-backs when sales are increasing. 

b.neither mystify nor magnify give-backs. 

c.mystify give-backs when sales are increasing. 

d.mystify give-backs when sales are decreasing. 





Financial Ma ment 




38)In a conclusion of encouragement sales utilizing spent absorb and accommodation narrations (percent- 

of-sales rule), when preparing pro forma financial propositions and planning financing, get incline to 

a.magnify retained hues and mystify the financing needed. 

b.magnify retained hues and magnify the afurban financing needed. 

c.mystify retained hues and magnify the financing needed. 

d.mystify retained hues and mystify the afurban financing needed. 

39) For real shape scolds, the forthcoming esteem shape constituent is 

a.rarely disclaiming. 

b.frequently senior than 1.0. 

c.never senior than 25. 

d.frequently close than O. 

40)The completion of specie that would possess to be invested today at a attached shape 

scold aggravate a exact conclusion in enjoin to correspondent a forthcoming completion is named 

a.offer esteem. 

b.forthcoming esteem. 

c.forthcoming esteem shape constituent. 

d.offer esteem shape constituent. 

41)The offer esteem of $200 to be sanctioned 10 years from today, showy an 

opening absorb of 10 percent, is 





42) The forthcoming esteem of a dollar as the shape scold sanctionions and 

___ the farther in the forthcoming an judicious guarantee is to be sanctioned. 

a.increases; sanctionions 

b.decreases; sanctionions 

c.decreases; curtails 

d.increases; curtails 

43) The offer esteem of a $25,000 persistence at a 14 percent allowance scold is 












44)The forthcoming esteem of $100 sanctioned today and guaranteeed in an statement for immodest 

years paying semiannual shape of 6 percent is 





45)The forthcoming esteem of an annuity of $1,000 each pity for 10 years, guaranteeed at 12 percent unificationed pityly is 





46)Adam borrows $4,500 at 12 percent per-annum unificationed shape to be 

rehired in immodest correspondent annual installments. The objective end-of-year accommodation is 





47)Ashley owns accumulation in a union which has sanctionably hired a enlargeing divi- 

dend aggravate the developed five years. The earliest year Ashley owned the accumulation, she re- 

ceived $1.71 per divide and in the fifth year, she sanctioned $2.89 per divide. 

What is the enlargement scold of the dividends aggravate the developed five years? 

a.7 percent 

b.5 percent 

c.14 percent 

d.12 percent 

48)Julian was attached a gold fabricate originally escheatmentd for $1 by his great-grand- 

father 50 years ago. Today the fabricate is appraise $450. The scold of give-back realized 

on the sale of this fabricate is approximately correspondent to 




d.cannot be decided behind a while attached notice. 





Financial M ment 

49)Aunt Bertha borrows $19,500 from the bank at 8 percent per-annum com- 

pounded shape to be rehired in 10 correspondent annual installments. The shape 

hired in the third year is _ 





50)What annual scold of give-back would Grandma Zoe need to shape if she guarantees 

$1,000 per month into an statement threshold one month from today in enjoin 

to possess a completion of $1,000,000 in 30 years? 





51) is the hazard of forfeiture or the variability of give-backs associated behind a while a 

attached asset. 





52) The intent of an causative portfolio is to 

a.minimize shape in enjoin to minimize endanger. 

b.maximize endanger for a attached roll of give-back. 

c.maximize endanger in enjoin to maximize shape. 

d.minimize endanger for a attached roll of give-back. 

53)Combining disclaimingly correlated goods having the selfselfselfidentical expected give-back 

results in a portfolio behind a while roll of expected give-back and _ 

roll of endanger. 

a.the selfsame; a inferior 

b.a inferior; a loftier 

c.a loftier; a inferior 

d.the selfsame; a loftier 









54) The mind of adding an asset behind a while a disclaiming or low real beta is to 

a.subject endanger. 

b.acception shape. uce shape. 

d.acception endanger. 

55)The constituent of an asset's endanger that is attributeffectual to strong-specific, random 

causes is named 

a.fitful endanger. 

b.inrelative endanger. 

c.nondiversifieffectual endanger. 

d.none of the aloft 

56) endanger represents the constituent of an asset's endanger that can be eliminated 

by combining goods behind a while close than infallible real apposition. 





57)Nico owns 100 divides of accumulation X which has a compensation of $12 per divide and 200 

shares of accumulation Y which has a compensation of $3 per divide. What is the scold of 

N ico's portfol io invested in accumulation X? 





58)  As endanger antipathy sanctionions 

a.investors' required scold of give-back get curtail. 

b.a strong's beta get curtail. 

c.a strong's beta wi II sanctionion. 

d.investors' required scold of give-back get sanctionion. 

59) The scold of shape constitutes makeweight among the amount of savings and the ask-for for cannonade funds. 










Financial Management 





60)The scold of shape is typically the required scold of give-back on a 

three-month U.S. Treasury score. 





61)An upward-sloping acquiesce incurvation that manifests openly cheaper short-term 

borrowing absorbs than long-term borrowing absorbs is named 

a.downfair acquiesce incurvation. 

b.natural acquiesce incurvation. 

c.inverted acquiesce incurvation. 

d.none of the aloft. 

62) The absorb of long-term defect openly that of short-term defect. 

a.has no narration to close than correspondent to senior than 

63) is a hired unique, confirmation, or commercial bank credit province that acts as a third keep-aparty to a chain indenture to secure that the childrenr 

does not defect on its controbjective responsibilities to the chainholders. 

a.A creditee 

b.A chain rating agency 

c.A chain childrenr 

d.An cannonade banker 

64) An development of a model defect edibles is the 

a.constraints on posterior borrowing. 

b.capability to pay taxes and other liabilities when due. 

c.limiting of the confirmation's annual chief dividend accommodations. 

d.restricting the confirmation from disposing of unroving goods. 

65) Another call for a deeply allowanceed chain that pays no coupon shape is a 

a.floati ng scold chain. 

b.junk chain. 

c.subordinated debenture. 

d.cipher coupon chain. 










66) A debenture is 

a.a impregnable chain that is impregnable by unexact goods. 

b.a tedious legitimate muniment stating the stipulations below which a chain has been childrend. unimpregnable chain that merely beliefworthy strongs can children. 

d.a chain impregnable by unfair asset. 

67) In utilizing a    the childrenr can per-annum remove the incomplete year's shape accrual behind a whileout having to objectively pay the shape until the chain matures. 

a.junk chain 

b.extendible notes 

c.cipher coupon chain 

d.incomplete scold chain 

68) The close regular a chief stream, the    the endanger, and the the offer esteem of the chief stream. 

a.higher; loftier 

b.lower; inferior 

c.higher; inferior 

d.lower; loftier 

69)Jia Hua Enterprises wants to children sixty 20-year, $1,000 par esteem, cipher- 

coupon chains. If each chain is compensationd to acquiesce 7 percent, how abundant get Jia H ua sanction (ignori ng issuance absorbs) when the chains are earliest sold? 


a. $12,393 

b. $15,505 

c. $18,880 

d. $11,212 

e. $20,000 

70)If subjoined a whiledrawal were to appear, accumulationholders would possess foregoing demand on goods aggravate 

a.preferred accumulationholders. 

b.unimpregnable beliefors. 

c.impregnable beliefors. one. 











71)The customs of issuing preferred accumulation from the despiceffectual accumulationholder's perspective i ncl ude all of the followi ng EXCEPT 

a.increased leverage. 


c.use in mergers. 

d.superiority of preferred accumulationholder's demand aggravate despiceffectual accumulationholders. 

72) All of the subjoined features may be individuality of preferred accumulation EXCEPT 

a.convertible. ripeness limit. 

c.callable. dividends. 

73) Preferred accumulationholders possess sensuality aggravate chainholders in the instance of accommodation. not possess sensuality aggravate chainholders in the instance of accommodation. not possess sensuality aggravate despiceffectual accumulationholders in the instance of accommodation. 

d.two of the aloft are gentleman propositions 

74)The opening for administration to escheatment a regular sum of divides of their strong's despiceffectual accumulation at a exact compensation aggravate a regular conclusion of term is a 

a.accumulation liberty. 

b.accumulation fair. 

c.pre-emptive fair. 


75) Accumulation fairs amount the accumulationholder behind a while 

a.cumulative voting privileges. 

b.the opening to sanction monstrous hues. 

c.the fair to chosen the board of plainors. 

d.regular escheatment privileges of afurban accumulation divides in plain scold naturalized on their sum of owned divides. 










76)Tangshan China Company's accumulation is incompletely selling for $80.00 per divide. 

The expected dividend one year from now is $4.00 and the required give-back is 13 percent. What is Tangshan's dividend enlargement scold showy that dividends are expected to enlarge at a steady scold incessantly? 





77)Which of the subjoined valuation rules is preferable to the others in the roll since it attends expected hues? 

a.PIE multiple 

b.accommodation esteem 

c.compass esteem 

d.offer val ue of the shape 

78)Nico Confirmation expects to genescold loose-chief streams of $200,000 per year 

for the plain five years. Beyond that term, loose chief streams are expected to enlarge at a steady scold of 5 percent per year incessantly. If the strong's medium absorb of chief is 15 percent, the dispense esteem of the strong's defect is $500,000, and Nico has a half pet divides of accumulation ungathered, what is the esteem of Nico's accumulation? 





79) A chief outgoings is all of the subjoined EXCEPT worth for incomplete asset comment. worth made for the shapeing goods of the strong. 

c.commmerely used to exwatch the roll of operations. 

d.expected to amount boons aggravate a conclusion of term senior than one year. 

80) schemes possess the selfselfselfidentical function; the sanctionance of one _ 

the others from suspect. 

a.Mutually exclusive; eliminates 

b.Replacement; does not eliminate 

c.Capital; eliminates 

d.Independent; does not eliminate 






Financial Ma ment 

81)In intergregarious chief budgeting judgments, gregarious endangers can be minimized using all of the subjoined strategies EXCEPT 

a.structuring the financing of such cannonades as equity rather than as defect. 

b.structuring the financing of such cannonades as defect rather than as equity. 

c.structuring the cannonade as a flexure hazard and selecting courteous-connected persomal sharer. 

d.none of the aloft 

82)When evaluating a chief budgeting scheme, the transmute in net afloat chief must be attended as keep-akeep-apart of 

a.the judicious cannonade. 

b.the incremental munificent chief inflows. 

c.the operati ng chief inflows. 

d.the operati ng chief outflows. 

83)The tax texture touching the sale of stout goods that are sold for their compass esteem fruits in 

a.recaptured derogation taxed as inferior proceeds. tax boon or burden. inferior tax boon. 

d.a chief shape tax burden and recaptured derogation taxed as inferior proceeds. 

84)A confirmation is selling an stout asset for $1,000. The asset, when escheatmentd, absorb $10,000, was nature depreciated below MACRS using a five- year rectification conclusion, and has been depreciated for immodest liberal years. If the as sumed tax scold is 40 percent on inferior proceeds and chief shapes, the tax commodities of this proceeding is 

a.$3,600 tax burden. 

b.$280 tax boon. 

c.$0 tax burden. 

d.$1,100 tax burden. 

85) Unsophisticated chief budgeting techniques do not 

a.scrutinize the extent of the judicious worth. 

b.receive into statement an unconventional chief stream archetype. 

c.evidently atwatch the term esteem of specie. 

d.use net give-backs as a mete of give-back. 







Financial Ma ment 




86) Should Tangshan Mining union sanction a new scheme if its culmination pay- 

back is 3.5 years and its judicious behind tax absorb is $5,000,000 and it is ex- 

pected to amount behind-tax munificent chief inflows of $1,800,000 in year 1, 

$1,900,000 in year 2, $700,000 in year 3 and $1,800,000 in year 4? 



c.It depends 

d.None of the aloft 

87)The keep-apartiality give-back that must be shapeed on a scheme in enjoin to license the strong's esteem illegitimate is 

a.the unification scold. 

b.the absorb of chief. 

c.the shape scold. 

d.the interior scold of give-back. 

88) A strong would sanction a scheme behind a while a net offer esteem of cipher because 

a.the scheme would improve the riches of the strong's owners. 

b.the give-back on the scheme would be real. 

c.the scheme would sustain the riches of the strong's owners. 

d.the give-back on the scheme would be cipher. 

89)What is the NPV for the subjoined scheme if its absorb of chief is 15 percent 

and its judicious behind tax absorb is $5,000,000 and it is expected to amount 

after-tax munificent chief inflows of $1,800,000 in year 1, $1,900,000 in year 

2, $1,700,000 in year 3 and $1,300,000 in year 4? 




d.None of the aloft 

90)What is the NPV for the subjoined scheme if its absorb of chief is 0 percent and its judicious behind tax absorb is $5,000,000 and it is expected to amount behind- 

tax munificent chief inflows of $1,800,000 in year 1, $1,900,000 in year 2, 

$1,700,000 in year 3 and $1,300,000 in year 4? 




d.None of the aloft 









91)The is the unification annual scold of give-back that the strong get shape  

it invests in the scheme and sanctions the attached chief inflows. 

a.interior scold of give-back 

b.absorb of chief 

c.allowance scold 

d.opening absorb 

92) When evaluating schemes using interior scold of give-back, 

a.the allowance scold and body of chief streams do not move interior scold of give-back. 

b.projects having loftier early-year chief streams incline to be preferred at inferior allowance scolds. 

c.projects having loftier early-year chief streams incline to be preferred at loftier allowance scolds. 

d.projects havi ng inferior early-year chief streams incline to be preferred at loftier  discou nt scolds. 

93)Diagrams that encourage the mapping of the multitudinous cannonade judgment alternatives and payoffs as courteous as their probabilities of appearrence are named 

a.multiple repay decomposition. 


c.judgment trees. 

d.sensitivity decomposition. 

94) The custom of using assumption in the chief budgeting regularity is 

a.the availability of a continuum of endanger-give-back trade-offs which may be used as the foundation for judgment-making. 

b.that it engenders a continuum of endanger-give-back trade-offs rather than a unique object respect. 

c.dependability of predecided verisimilitude distributions. 

d.tranquility of estimation. 

95) Breakeven chief instream refers to 

a.the keep-apartiality roll of chief instream inevitable for a scheme to be sanctionable, that is, IRR < absorb of chief. 

b.the keep-apartiality roll of chief instream inevitable for a scheme to be sanctionable, that is, N PV > $0. 

c.the keep-apartiality roll of chief instream inevitable for a scheme to be sanctionable, that is, NPV < $0. 

d.none of the aloft is correct 



96)A behavioral entrance that evaluates the impression on the strong's give-back of concomitant transmutes in a sum of scheme variables is named 

a.assumption decomposition. 

b.scenario decomposition. 

c.sensitivity decomposition. 

d.none of the aloft 



97) The reflects the give-back that must be shapeed on the attached scheme to discharge the strong's owners adequately according to the scheme's variability of chief streams. 

a.interior scold of give-back 

b.absorb of chief 

c.medium scold of give-back 

d.risk-adjusted allowance scold 

98)An entrance to chief narrationning that involves graphing scheme give-backs in 

descending enjoin opposite the completion dollar cannonade to particularize the bunch of sanctioneffectual schemes is named the offer esteem entrance. 

b.the interior scold of give-back entrance. 

c.the shapeability protest entrance. 

d.the payback entrance. 

99) The absorb to a confirmation of each fashion of chief is relative upon 

a.the endanger-loose scold of each fashion of chief plus the affair endanger and the financial endanger of the strong. 

b.the endanger-loose scold of each fashion of chief pi us the busi ness endanger of the strong. 

c.the endanger-loose scold of each fashion of chief plus the financial endanger of the strong. 

d.the endanger-loose scold of chains plus the affair endanger of the strong. 

100)  The anteriorly-tax absorb of defect for a strong which has a 40 percent brinkal tax-scold is 12 percent. The behind-tax absorb of defect is 

a.12 percent. 

b.7.2 percent. 

c.4.8 percent. 

d.6.0 percent.