Finance 30 Question Quiz Assistance
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30_question_quiz.docxWhich of the following is considered a hybrid organizational form?
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partnership |
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corporation |
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sole proprietorship |
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limited liability partnership |
Which of the following is a principal within the agency relationship?
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the CEO of the firm |
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a shareholder |
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the board of directors |
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a company engineer |
Which of the following presents a summary of the changes in a firm’s balance sheet from the beginning of an accounting period to the end of that accounting period?
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The statement of cash flows. |
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The statement of retained earnings. |
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The statement of working capital. |
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The statement of net worth. |
Teakap, Inc., has current assets of $ 1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000, and retained earnings of $1,468,347. How much long-term debt does the firm have?
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$803,010 |
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$1,844,022 |
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$2,123,612 |
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$2,303,010 |
Efficiency ratio: Gateway Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales in inventory?
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61.7 days |
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57.9 days |
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65.2 days |
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64.3 days |
Leverage ratio: Your firm has an equity multiplier of 2.47. What is its debt-to-equity ratio?
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0.60 |
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1.74 |
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1.47 |
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0 |
Which of the following is not a method of “benchmarking”?
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Identify a group of firms that compete with the company being analyzed. |
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Evaluating a single firm’s performance over time. |
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Conduct an industry group analysis. |
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Utilize the DuPont system to analyze a firm’s performance. |
Present value: Jack Robbins is saving for a new car. He needs to have $ 21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar.)
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$16,670 |
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$26,454 |
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$19,444 |
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$22,680 |
PV of multiple cash flows: Ferris, Inc., has borrowed from their bank at a rate of 8 percent and will repay the loan with interest over the next five years. Their scheduled payments, starting at the end of the year are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What is the present value of these payments? (Round to the nearest dollar.)
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$2,615,432 |
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$2,735,200 |
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$2,431,224 |
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$2,815,885 |
PV of multiple cash flows: Ajax Corp. is expecting the following cash flows—$79,000, $112,000, $164,000, $84,000, and $242,000—over the next five years. If the company's opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)
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$429,560 |
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$414,322 |
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$480,906 |
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$477,235 |
Future value of an annuity: Jayadev Athreya has started on his first job. He plans to start saving for retirement early. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a return of 10 percent. How much will Jayadev have at the end of 45 years? (Round to the nearest dollar.)
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$3,594,524 |
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$1,745,600 |
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$5,233,442 |
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$2,667,904 |
Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)
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12% |
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16% |
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40% |
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32% |
Bond price: Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon rate. Investors buying the bond today can expect to earn a yield to maturity of 6.875 percent. What should the company's bonds be priced at today? Assume annual coupon payments. (Round to the nearest dollar.)
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$923 |
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$972 |
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$1,066 |
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$1,014 |
PV of dividends: Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the following three years. If their required rate of return is 14 percent, what is the present value of their dividends over the next four years?
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$9.72 |
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$13.50 |
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$12.50 |
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$11.63 |
Capital rationing. TuleTime Comics is considering a new show that will generate annual cash flows of $100,000 into the infinite future. If the initial outlay for such a production is $1,500,000 and the appropriate discount rate is 6 percent for the cash flows, then what is the profitability index for the project?
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1.11 |
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0.11 |
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1.90 |
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0.90 |
What decision criteria should managers use in selecting projects when there is not enough capital to invest in all available positive NPV projects?
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The profitability index. |
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The discounted payback. |
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The internal rate of return. |
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The modified internal rate of return. |
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How firms estimate their cost of capital: The WACC for a firm is 13.00 percent. You know that the firm's cost of debt capital is 10 percent and the cost of equity capital is 20%. What proportion of the firm is financed with debt?
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