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					The process of identifying projects which will produce positive cash flows is called:

      working capital management.
      financial depreciation.
      agency cost analysis.
      capital budgeting.
      capital structure
 Question 2                                                                       1 points Save
              The financial statement summarizing the value of a firm's equity on a
              particular date is the:

                   income statement.
                   balance sheet.
                   statement of cash flows.
                   cash flow statement.
                   dividend statement.
 Question 3                                                                          1 points Save
              The annual coupon divided by the face value of a bond is called the:

                   coupon.
                   face value.
                   maturity.
                   yield to maturity.
                   coupon rate.
 Question 4                                                                          1 points Save
              Preferred shareholders are granted:

                   the right to dividends prior to common shareholders.
                   a guarantee of dividends of a set amount every quarter.
                   annual dividends equal to a set percentage of the firm's annual net
                   income.
                   annual dividends equal to a set percentage of the preferred stock's
                   market value.
                   the right to receive unpaid dividend payments provided the stock is
                   noncumulative.
Question 5                                                                        1 points Save
             Gateway Lodging has annual sales of $1.22 million, total debt of $380,000,
             total equity of $750,000, and a profit margin of 7.45 percent. What is the
             return on assets?

                   6.97 percent
                   7.13 percent
                   7.56 percent
                   7.78 percent
                   8.04 percent
Question 6                                                                        1 points Save
             The common stock of Flo's Flowers pays an annual dividend that is
             expected to increase by 3.6 percent per year. The stock commands a market
             rate of return of 11.6 percent and sells for $37.80 a share. What is the
             expected amount of the next dividend?

                   $2.92
                   $3.02
                   $3.13
                   $3.26
                   $3.40
Question 7                                                                         1 points Save
             Your firm has total assets of $1,400, fixed assets of $600, long-term debt of
             $700, and short-term debt of $100. What is the amount of net working
             capital?

                   $0
                   $100
                   $600
                   $700
                   $800
Question 8                                                                          1 points Save
             Jeff invests $3,000 in an account that pays 7 percent simple interest. How
             much more could he have earned over a 20-year period if the interest had
             compounded annually?

                   $2,840.00
                   $3,212.12
                   $3,778.54
                   $4,087.18
                   $4,409.05
Question 9                                                                          1 points Save
             The Goodie Barn has a 7 percent coupon bond outstanding that matures in
             13.5 years. The bond pays interest semiannually. What is the market price
             per bond if the face value is $1,000 and the yield to maturity is 14.78
             percent?

                   $255.27
                   $550.40
                   $674.66
                   $954.92
                   $967.38
Question 10                                                                      1 points Save
              The amount by which the call price exceeds the bond's par value is the:

                    coupon rate.
                    redemption value.
                    call premium.
                    original-issue discount.
                    call rate.
Question 11                                                                       1 points Save
              The Row Boat Cafe has operating cash flow of $36,407. Depreciation is
              $4,609 and interest paid is $1,105. A net total of $3,780 was paid on long-
              term debt. The firm spent $18,000 on fixed assets and increased net
              working capital by $3,247. What is the amount of the cash flow to
              stockholders?

                    $10,275
                    $12,933
                   $15,160
                   $19,998
                   $20,045
Question 12                                                                       1 points Save
              The Burger Joint paid $420 in dividends and $611 in interest expense.
              The addition to retained earnings is $397.74 and net new equity is $750.
              The tax rate is 34 percent. Sales are $6,250 and depreciation is $710.
              What are the earnings before interest and taxes?

                   $1,576.67
                   $1,582.16
                   $1,660.00
                   $1,780.82
                   $1,850.00
Question 13                                                                       1 points Save
              Katrina's Fury has $697,400 in sales. The profit margin is 3.4 percent and
              the firm has 12,500 shares of stock outstanding. The market price per
              share is $33. What is the price-earnings ratio?

                   15.8
                   16.2
                   16.6
                   17.1
                   17.4
Question 14                                                                      1 points Save
              The primary goal of financial management is to:

                   maximize current dividends per share of the existing stock.
                   maximize the current value per share of the existing stock.
                   avoid financial distress.
                   minimize operational costs and maximize firm efficiency.
                   maintain steady growth in both sales and net earnings.
Question 15                                                                     1 points Save
              On your thirteenth birthday, you received $1,000 which you invested at
              6.5 percent interest, compounded annually. Your investment is now worth
              $5,476. How old are you today?

                    age 29
                    age 32
                    age 35
                    age 37
                    age 40
Question 16                                                                          1 points Save
              What is the net present value of a project that has an initial cash outflow
              of $18,900 and the following cash inflows? The required return is 13.25
              percent.




                    -$4,847.47
                    -$3,840.60
                    -$2,636.21
                    $3,109.16
                    $4,052.53
Question 17                                                                      1 points Save
              During the year, The Train Stop decreased its accounts receivable by $60,
              increased its inventory by $130, and decreased its accounts payable by
              $20. For these three accounts, the firm has a net:

                    $90 use of cash.
                    $50 use of cash.
                    $170 use of cash.
                    $90 source of cash.
                    $50 source of cash.
Question 18                                                                     1 points Save
              A firm generated net income of $624. The depreciation expense was $58
              and dividends were paid in the amount of $72. Accounts payables
              decreased by $28, accounts receivables increased by $16, inventory
              increased by $41, and net fixed assets increased by $28. What was the net
              cash flow from operating activity?

                    $497
                    $553
                    $597
                    $608
                    $641
Question 19                                                                      1 points Save
              Payments made by a corporation to its shareholders in the form of either
              cash or shares of stock are called:

                    retained earnings.
                    net income.
                    dividends.
                    redistributions.
                    infused equity.
Question 20                                                                          1 points Save
              Interest rates that have not been adjusted for inflation are called _____
              rates.

                    coupon
                    stripped
                    effective
                    real
                    nominal
Question 21                                                                      1 points Save
              The Corner Store paid $1,100 in dividends and $850 in interest this past
              year. Common stock increased by $500 and retained earnings decreased
              by $260. What is the net income for the year?

                    $840
                    $850
                    $860
                   $1,360
                   $1,0860
Question 22                                                                      1 points Save
              You borrow $187,500 to buy a house. The mortgage rate is 7.25 percent
              and the loan period is 25 years. Payments are made monthly. If you pay
              for the house according to the loan agreement, how much total interest
              will you pay?

                   $186,408
                   $219,079
                   $227,001
                   $264,319
                   $291,406
Question 23                                                                       1 points Save
              Faith invests $4,500 in an account that pays 4 percent simple interest.
              How much money will she have at the end of eight years?

                   $4,680
                   $5,367
                   $5,940
                   $6,122
                   $6,159
Question 24                                                                    1 points Save
              Which one of the following correctly defines the chain of command in a
              typical corporate organizational structure?

                   The vice president of finance reports to the chairman of the board.
                   The chief executive officer reports to the board of directors.
                   The controller reports to the president.
                   The treasurer reports to the chief executive officer.
                   The chief operations officer reports to the vice president of
                   production.
Question 25                                                                       1 points Save
              At the beginning of the year, long-term debt of a firm is $68,700 and total
              debt is $71,425. At the end of the year, long-term debt is $92,460 and
              total debt is $95,609. The interest paid is $5,412. What is the amount of
              the cash flow to creditors?

                      $18,348
                      $12,936
                    $2,414
                    $23,760
                    $29,172
Question 26                                                                          1 points Save
              Interest earned on both the initial principal and the interest reinvested
              from prior periods is called _____ interest.

                    free
                    annual
                    simple
                    interest on
                    compound
Question 27                                                                          1 points Save
              The mix of debt and equity capital for a firm is referred to as the firm's:

                    working capital management.
                    cash management.
                    cost analysis.
                    capital budgeting.
                    capital structure.
Question 28                                                                        1 points Save
              The sources and uses of cash over a stated period of time are reflected on
              the:

                    income statement.
                    balance sheet.
                    tax reconciliation statement.
                    statement of cash flows.
                    statement of operating position.
Question 29                                                                        1 points Save
              A project has an initial cost of $2,400. The cash inflows are $0, $1,600,
              $1,100, and $700 over the next four years, respectively. What is the
              payback period?

                    1.73 years
                    2.50 years
                    2.73 years
                    3.11 years
                    never
Question 30                                                                      1 points Save
              An investment has the following cash flows. Should the project be
              accepted if it has been assigned a required return of 14 percent? Why or
              why not?




                    No; The IRR exceeds the required return by about 1.08 percent.
                    No; The IRR is less than the required return by about 0.97 percent.
                    Yes; The IRR exceeds the required return by about 1.08 percent.
                    Yes; The IRR is less than the required return by about 0.97 percent
                    Yes; The IRR is less than the required return by about 1.08 percent.
Question 31                                                                     1 points Save
              How much are you willing to pay for one share of Delphia stock if the
              company just paid a $1.34 annual dividend, the dividends increase by 2.8
              percent annually, and you require a 14 percent rate of return?

                    $9.84
                    $11.96
                    $12.30
                    $12.99
                    $13.61
Question 32                                                                     1 points Save
              Today, you earn a salary of $42,500. What will be your annual salary 10
              years from now if you earn annual raises of 3.2 percent?

                    $56,100.00
                    $57,414.06
                    $58,235.24
                    $59,122.08
                    $59,360.45
Question 33                                                                           1 points Save
              The common stock of BJ's Auto Clinic sells for $38.25 a share. The stock
              is expected to pay $1.90 per share next month when the annual dividend
              is distributed. BJ's has established a pattern of increasing their dividends
              by 2.5 percent annually and expects to continue doing so. What is the
              market rate of return on this stock?

                    4.41 percent
                    4.97 percent
                    7.38 percent
                    7.47 percent
                    7.59 percent
Question 34                                                                       1 points Save
              A form of equity which receives no preferential treatment in either the
              payment of dividends or in bankruptcy distributions is called _____ stock.

                    dual class
                    cumulative
                    deferred
                    preferred
                    common
Question 35                                                                      1 points Save
              Your grandmother invested one lump sum 42 years ago at 3.5 percent
              interest. Today, she gave you the proceeds of that investment which
              totaled $28,204.37. How much did your grandmother originally invest?
                    $4,500
                    $6,650
                    $7,200
                    $7,500
                    $9,000
Question 36                                                                      1 points Save
              Wesley-Townsend bonds have an 8.25 percent coupon and pay interest
              annually. The face value is $1,000 and the current market price is
              $1,004.60 per bond. The bonds mature in 17.5 years. What is the yield to
              maturity?

                    7.82 percent
                    7.97 percent
                    8.20 percent
                    8.25 percent
                    8.45 percent
Question 37                                                                       1 points Save
              Your credit card company quotes you a rate of 18.9 percent. Interest is
              billed monthly. What is the actual rate of interest you are paying?

                    19.48 percent
                    19.67 percent
                    20.63 percent
                    20.87 percent
                    21.21 percent
Question 38                                                                      1 points Save
              Angela is able to pay $230 a month for 6 years on a car loan. If the
              interest rate is 7.9 percent, how much can she afford to borrow to buy a
              car?

                    $13,154.54
                    $13,408.17
                    $13,528.28
                   $13,666.67
                   $13,809.19
Question 39                                                                    1 points Save
              The financial statement summarizing a firm's performance over a period
              of time is the:

                   income statement.
                   balance sheet.
                   statement of cash flows.
                   tax reconciliation statement.
                   market value report.
Question 40                                                                       1 points Save
              What is the effective annual rate if a bank charges you 8.48 percent
              compounded quarterly?

                   8.20 percent
                   8.48 percent
                   8.75 percent
                   9.02 percent
                   9.46 percent
Question 41                                                                       1 points Save
              The voting procedure where you must own fifty percent plus one of the
              outstanding shares of stock to guarantee that you will win a seat on the
              board of directors is called _____ voting.

                   democratic
                   cumulative
                   straight
                   deferred
                   proxy
Question 42                                                                    1 points Save
              One year ago, you invested $2,500. Today it is worth $2,789.50. What
              rate of interest did you earn?
                   8.67 percent
                   9.89 percent
                   10.67 percent
                   11.42 percent
                   11.58 percent
Question 43                                                                      1 points Save
              What is the interest rate charged per period multiplied by the number of
              periods per year called?

                   effective annual
                   annual percentage
                   periodic interest
                   compound interest
                   daily
Question 44                                                                      1 points Save
              A firm has $680 in inventory, $2,320 in fixed assets, $280 in accounts
              receivables, $490 in accounts payable, and $130 in cash. What is the
              amount of the current assets?

                   $410
                   $960
                   $1,090
                   $2,920
                   $3,410


                                                                               1 points Save
     Question 45
                       You are buying a previously owned car today at a price of
                       $4,950. You are paying $750 down in cash and financing the
                       balance for 42 months at 8.45 percent. What is the amount of
                       each loan payment?

                             $108.54
                             $115.05
                                $115.86
                                $135.60
                                $136.55
Question 46                                                                       1 points Save
              Jeminson's Hardware has accounts payable of $682, inventory of $3,608,
              cash of $340, fixed assets of $4,211, accounts receivable of $418, and
              long-term debt of $3,750. What is the value of the net working capital to
              total assets ratio?

                    .29
                    .37
                    .43
                    .47
                    .56
Question 47                                                                             1 points Save
              A project is acceptable when the net present value:

                    is negative.
                    is positive.
                    is negative provided the only cash outflow occurs at time zero.
                    is positive provided the internal rate of return is less than the
                    required return.
                    is positive provided the profitability index is less than one.
Question 48                                                                      1 points Save
              The specified date on which the principal amount of a bond is repaid is
              called the:

                    coupon.
                    face value.
                    maturity.
                    yield to maturity.
                    coupon rate.
Question 49                                                                      1 points Save
              You just won the lottery! As your prize you will receive $1,500 a month
              for twenty years. If you can earn 9 percent on your money, what is this
              prize worth to you today?

                    $152,087.19
                    $156,098.29
                    $157,408.16
                    $164,313.82
                    $166,717.43
Question 50                                                                     1 points Save
              Relationships determined from a firm's financial information and used for
              comparison purposes are known as:

                    financial ratios.
                    comparison statements.
                    dimensional analysis.
                    scenario analysis.
                    solvency analysis.

				
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