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accounting mcq quiz with A+ answers-.Regatta, Inc., has six-year bonds outstanding




Question;1.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.);$923;$1,066;$1014;$972;2. A cost which remains constant per unit at various levels;of activity is a;? manufacturing cost;? mixed cost;? fixed cost;? variable cost;3. External financing needed: Jockey Company has total;assets worth $4,417,665. At year-end it will have net income of $2,771,342 and;pay out 60 percent as dividends. If the firm wants no external financing, what;is the growth rate it can support?;? 25.1%;? 30.3%;? 32.9%;? 27.3%;4. What decision criteria should managers use in selecting;projects when there is not enough capital to invest in all available positive;NPV projects?;? the discounted payback;? the profitability index;? the internal rate of return;? the modified internal rate of return;5. Jayadev Athreya has started his first job. 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?;? $5,233,442;? $3,594,524;? $1,745,600;? $2,667,904;6. In a process cost system, product costs are summarized;? after each unit is produced.;? when the products are sold.;? on production cost reports.;? on job cost sheets.;7. Gateway, Corp. has an inventory turnover of 5.6. What is;the firm?s days?s sales in inventory?;? 61.7;? 65.2;? 57.9;? 64.3;8. Which of the following financial statements is concerned;with the company at a point in time?;? balance sheet;? retained earnings statement;? income statement;? statement of cash flows;9. Your firm has an equity multiplier of 2.47. What is the;debt-to-equity ratio?;? 0;? 0.60;? 1.74;? 1.47;10. 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);?;$19,444;?;$22,680;? $16,670;? $26,454;11. 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?;? 0.11;? 1.11;? 1.90;? 0.90;12. Variance reports are;? SEC financial reports;? external financial reports;? internal reports for management;? all of these;13. The cash conversion cycle?;? shows how long the firm keeps its inventory before selling;it.;? begins when the firm invests cash to purchase the raw;materials that would be used to produce the goods that the firm manufactures.;? estimates how long it takes on average for the firm to;collect its outstanding accounts receivables balance.;? begins when the firm uses its cash to purchase raw;materials and ends when the firm collects cash payments on its credit sales.;14. Internal reports that review the actual impact of;decisions are prepared by;? factory workers;? the controller;? management accountants;? department heads;15. Which of the following presents a summary of changes in;a firm?s balance sheet from the beginning of an accounting period to the end of;that accounting period?;? the statement of retained earnings;? the statement of working capital;? the statement of net worth;? the statement of cash flows;16. 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 if 14 percent, what is the present;value of their dividends over the next four years?;? $11.63;? $13.50;? $12.50;? $9.72;17. Process costing is used when;? the production process is continuous.;? costs are to be assigned to specific jobs.;? dissimilar products are involved;? production is aimed at fulfilling a specific customer order.;18. The break-even point is where;? total variable costs equal total fixed costs.;? total sales equal total fixed costs.;? contribution margin equals total fixed costs.;? total sales equal total variable costs.;19. Horizontal analysis is also known as;? linear analysis;? common size analysis;? vertical analysis;? trend analysis;20. The accumulation of accounting data on the basis of the;individual manager who has the authority to make day-to-day decisions about;activities in an area is called;? flexible accounting;? static reporting;? master budgeting;? responsibility accounting;21. The convention of consistency refers to consistent use;of accounting principles;? among accounting periods;? within industries;? throughout the accounting period;? among firms;22. Which of the following is considered a hybrid;organizational form?;sole proprietorship;partnership;corporation;limited liability partnership;23. The process of evaluating financial data that change;under alternative courses of action is called;contribution margin analysis;double entry analysis;incremental analysis;cost-benefit analysis;24. Turnbull Corp. had an EBIT of $247 million in the last;fiscal year. Its depreciation and amortization expenses amounted to $84;million. The firm has 135 million shares outstanding and a share price of;$12.80. A competing firm that is very similar to Turnbull has an enterprise;value/EBITDA multiple of 5.40.;What is the enterprise value of Turnbull Corp.? Round to the;nearest million dollars.;$1,787 million;$453.6 million;$1,315 million;$1,344 million;25. Which of the following is an advantage of corporations;relative to partnerships and sole proprietorships?;reduced legal liability for investors;harder to transfer ownership;most common form of organization;lower taxes;26. 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?;$2,303,010;$1,844,022;$803,010;$2,123,612;27. Horizontal analysis is a technique for evaluating a;series of financial statement data over a period of time;to determine the amount and/or percentage increase or;decrease that has taken place.;to determine which items are in error.;that has been arranged from the lowest number to the highest;number.;that has been arranged from the highest number to the lowest;number.;28. M&M Proposition 1: Dynamo Corp. produces annual cash;flows of $150 and is expected to exist forever. The company is currently;financed with 75 percent equity and 25 percent debt. Your analysis tells you;that the appropriate discount rates are 10 percent for the cash flows, and 7;percent for the debt. You currently own 10 percent of the stock.;If Dynamo wishes to change its capital structure from 75;percent equity to 60 percent equity and use the debt proceeds to pay a special;dividend to shareholders, how much debt should they use?;$225;$321;$375;$600;29. An activity that has a direct cause-effect relationship;with the resources consumed is a(n);product activity;cost driver;overhead rate;cost pool;30. The group of users of accounting information charged;with achieving the goals of the business is its;investors;auditors;creditors;managers;31. The major element in budgetary control is;the valuation of inventories;the comparison of actual results with planned objectives.;the preparation of long-term plans;the approval of the budget by the stockholders;32. The most important information needed to determine if;companies can pay their current obligations is the;relationship between short-term and long-term liabilities;net income for this year;relationship between current assets and current liabilities;projected net income for next year;33. An unrealistic budget is more likely to result when it;has been developed by all levels of management.;is developed with performance appraisal usages in mind.;has been developed in a bottom up fashion.;has been developed in a top down fashion.;34. When a company assigns the costs of direct materials;direct labor, and both variable and fixed manufacturing overhead to products;that company is using;absorption costing;operations costing;variable costing;product costing;35. Firms that achieve higher growth rates without seeking;external financing;have less equity and/or are able to generate high net income;leading to a high ROE.;are highly leveraged;Have a low plowback ratio;None of these;36. 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.);$429,560;$477,235;$480,906;$414,322;37. 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.);16%;32%;12%;40%;38. If a company?s weighted average cost of capital is less;than the required return on equity, then the firm;has debt in its capital structure;is perceived to be safe;is financed with more than 50% debt;partnership;39. 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?;30%;70%;33%;50%


Paper#42655 | Written in 18-Jul-2015

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