Finance project needs done asap

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1. Which of the following instruments is a derivative market security?

Chinese yuan.

Stock traded in capital markets.

British pounds.

wheat futures.

Question 2

1.  

You are going to receive $2,500 in two years and $4,000 in four years. What is the combined present value of these future payments if interest rates are 7 percent?

$3,051.58

$5,235.18

$2,183.60

$6,955.00

Question 3

1.  

A company has a profit margin of 12.3%, a total asset turnover of 16.4, and an equity multiplier of 8.0. What is this companyâ s ROE?

13.1%

98.0%

2.0%

16.1%

Question 4

1.  

Suppose we observe the following rates: 1R1 = 2.0%, 1R2 = 2.5%. If the unbiased expectations theory of the term structure of interest rates holds, what is the one-year interest rate expected one year from now, E(2r1)?

3.00 percent

2.5 percent

2.0 percent

4.5 percent

Question 5

1.  

A company has a quick ratio of 0.78, with $205 million in current assets and $120 million in current liabilities. What must be the companyâ s inventory?

$24 million

$111 million

$171 million

$200 million

Question 6

1.  

One-year Treasury bills currently earn 0.25 percent. You expect that one year from now, one-year Treasury bill rates will increase to 0.50 percent. If the unbiased expectations theory is correct, what should the current rate be on two-year Treasury securities?

0.125 percent

2.00 percent

0.37 percent

0.50 percent

Question 7

1.  

During the financial crisis that started in 2006 and 2007, the decreased availability of credit, along with damaged investor confidence, led businesses to

reduce their forecasted sales and revenue figures.

reduce dividend payout ratios.

increase spending on energy-related infrastructure.

increased their workforces.

Question 8

1.  

A companyâ s 10-year bonds currently yield 3.25 percent. The expected inflation premium is 1.5 percent annually and the real interest rate is expected to be 1.5 percent annually over the next 10 years. The liquidity risk premium on the bonds is 0.1 percent. The maturity risk premium is 0.05 percent on 2-year securities and increases by 0.01 percent for each additional year to maturity. Calculate the default risk premium on the 10-year bonds.

0.13 percent

0.2 percent

0.02 percent

3.00 percent

Question 9

1.  

In 2009, Sanchez Tuxedo, Inc. announced an ROA of 7.45%, ROE of 12.5%, and profit margin of 15.75%. The firm had common stockholdersâ equity of $13,588,800 at year-end 2009. Calculate the 2009 value of total assets for Sanchez Tuxedo, Inc.

$13,588,800

$2,140,236

$22,800,000

$11,400,000

Question 10

1.  

A company has 10-year bonds with an equilibrium rate of return of 5.5 percent. For all securities, the inflation risk premium is 2.25 percent and the real interest rate is 1.0 percent. The security's liquidity risk premium is 0.25 percent and maturity risk premium is 0.35 percent. The security has no special covenants. Calculate the bond's default risk premium.

3.85 percent

1.65 percent

4.5 percent

2.65 percent

Question 11

1.  

One of the disadvantages of a sole proprietorship is

single taxation

unlimited liability

easy access to the capital markets

double taxation

Question 12

1.  

Accounts receivable turnover for a company was 12, and its accounts receivable balance averaged $50,000. What were credit sales for the year?

$600,000

$1,200,000

$4,166,667

$4,167

Question 13

1.  

Based on economists' forecasts and analysis, one-year Treasury bill rates and the liquidity premium for next year are expected to be as follows: 1R1 = 2.94%; E(2R1) = 2.00%; L2 = 0.10%. Using the liquidity premium hypothesis, calculate the current rate on a two-year Treasury security.

3.52%

2.34%

3.99%

2.52%

Question 14

1.  

If you can put $1,000 per year at the end of each of the next six years into a stock earning 15 percent per year, what will your stock be worth at the end of the sixth year?

$6,000

$1,150

$6,900

$8,754

Question 15

1.  

A company has a market price per share of $55, earnings of $8 million, and two million shares outstanding. What is the companyâ s price-earnings ratio?

6.88

13.75

20.62

27.5

Question 16

1.  

Which of the following considerations in financial management would likely not maximize ownerâ s equity value?

How best to bring additional funds into the firm.

Which projects to invest in.

How best to return the profits from projects to the owners over time.

How to maximize employment.

Question 17

1.  

Suppose we observe the following rates: 1R1 = 6.5%, 1R2 = 8.5%, and E(2r1) = 10.5%. If the liquidity premium theory of the term structure of interest rates holds, what is the liquidity premium for year 2, L2?

0.056 percent

0.059 percent

0.0376 percent

0.054 percent

Question 18

1.  

You note the following yield curve in The Wall Street Journal. According to the unbiased expectations hypothesis, what is the one-year forward rate for the period beginning one year from today, 2f1? One day maturity yields 0.01%; One year maturity yields 0.15%; Two year maturity yields 0.35%; and Three year maturity yields 0.60%.

0.55 percent

1.00 percent

0.45 percent

1.55 percent

Question 19

1.  

What is the present value of annual $250 payments made for the next 15 years if interest rates are 11%?

$1,551.22

$3,595.43

$775.61

$1,797.72

Question 20

1.  

Suppose that you have 40 years before retirement. You want to contribute $100 per month to an investment account for the first 20 years, then stop contributing to that account. After the first 20 years go by, you want to open another retirement and put in $300 each month for the last 20 years. Which account will have accumulated the greatest at retirement, assuming you earn 8 percent on both accounts, and how much more will be in that account?

First account greater by $97,834

Second account grater by $97,834

First account greater by $24,000

Second account greater by $24,000

Question 21

1.  

If the industry average debt-to-equity ratio is 2.17 times, and the average equity for the industry is $310 million, what is the average debt for the industry?

$527.0 million

$155.0 million

$672.7 million

$640.0 million

Question 22

1.  

The top part of Brady's Knee Braces, Inc,'s 2008 and 2009 balance sheets is listed below (in millions of dollars). Calculate Brady's Quick ratio for 2008 and 2009. Current assets 2008 2009 Current liabilities 2008 2009 Cash and marketable  Securities $ 22 $ 31 Accrued wages and taxes $ 27 $ 31 Accounts receivable 108 130 Accounts payable 67 76 Inventory 160 188 Notes payable 60 67 Total $ 290 $349 Total $ 154 $174

0.14 and 0.18

0.84 and 0.93

1.88 and 2.01

1.61 and 1.71

Question 23

1.  

A car dealer will sell you a car for $25,000. You have two financing options. The first option is to reduce the car's price by $2,000 and pay monthly payments on a four year loan at 6% APR. The second option is to pay full price, but pay monthly payments on a four year loan at 2% APR. Which financing option is cheaper per month? By how much?

first cheaper by $4 per month

first cheaper by $2 per month

second cheaper by $4 per month

second cheaper by $2 per month

Question 24

1.  

You have borrowed $4,000 from your parents after graduation to get settled into your career. If they charge you 3% percent APR and you can pay them $100 per month, how long will it take to pay them back?

37 months

40 months

43 months

45 months

Question 25

1.  

A good deal of research literature suggests that allowing the manager a certain amounts of perks might actually

force the company to file for bankruptcy protection

lower managersâ productivity

boost managersâ productivity

lower owner value