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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.