Advanced Finance exam

1. Blue Bottles, Inc., has a marginal tax rate of 34 percent and an average tax rate of 21 percent. If the firm earns $212,500 in taxable income, how much will they owe in taxes?  A. $37,500 B. $38,625 C. $42,775 D. $44,625 E. $62,475

2. Use the following tax table to answer this question:    3. Theresa's Boutique, Inc., has taxable income of $82,348. How much does Theresa's owe in taxes?  A. $13,750 B. $14,689 C. $16,248 D. $20,587 E. $27,998

4. Blackwell Industries has sales of $513,400, total assets of $476,500, and a profit margin of 6 percent. What is the return on assets?  A. 6.46 percent B. 7.50 percent C. 7.67 percent D. 9.28 percent E. 10.77 percent

Use the following financial information to answer questions #5 and #6    5. For 2006, the cash flow from assets is __________, the cash flow to creditors is __________, and the cash flow to stockholders is:  A. $315; $799; -$484. B. $407; $660; -$253. C. $464; $701; -$237. D. $787; $701; -$86. E. $533; $799; -$266.

6. In whole dollars, the operating cash flow for 2005 is __________ and for 2006 it is:  A. $913; $1,299. B. $994; $770. C. $236; $992. D. $360; $872. E. $627; $873.

7. A statement which presents all items in percentage terms is called a(n):  A. balance sheet. B. ratio statement. C. common-size statement. D. income statement. E. time-trend analysis.

8. The Du Pont identity is comprised of which three of the following? I. equity multiplier II. total debt ratio III. market-to-book ratio IV. profit margin V. total asset turnover  A. I, II, and IV only B. II, III, and IV only C. I, IV, and V only D. II, IV, and V only E. I, III, and IV only

9. The Corner Auto Store will sell you a $3,500 car for $99 a month for 48 months. What is the interest rate?  A. 14.90 percent B. 15.18 percent C. 15.46 percent D. 15.89 percent E. 16.12 percent

10. The house you want to buy costs $167,800. You plan to make a cash down payment of 10 percent and finance the balance over 20 years at 7.25 percent. What will be the amount of your monthly mortgage payment?  A. $1,077.78 B. $1,193.63 C. $1,212.50 D. $1,287.50 E. $1,414.14

12. At the end of this month, you will start saving $150 a month for retirement through your company's retirement plan. Your employer will contribute an additional $.50 for every $1.00 you save. If you are employed by this firm for 30 more years and earn an average 12 percent on your retirement savings, how much will you have in your retirement account 30 years from now?  A. $731,016.94 B. $786,366.93 C. $797,211.53 D. $802,008.12 E. $816,333.33

13.  An 8 percent $1,000 bond matures in 13 years, pays interest semi-annually, and has a yield to maturity of 9.45 percent. What is the current market price of the bond?   A.  $601.58 B.  $647.76 C.  $892.76 D.  $909.09 E.  $930.75

14.  The 8 percent coupon bonds of the Peterson Co. are selling for 98 percent of par value. The bonds mature in 5 years and pay interest semi-annually. These bonds have a yield to maturity of _____ percent.   A.  8.16 B.  8.18 C.  8.33 D.  8.39 E.  8.50