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Question;Which;of the following is considered a hybrid organizational form?;corporation;limited liability partnership;partnership;sole proprietorship;Multiple Choice;Question 59;Which of the following;is a principal within the agency relationship?;a shareholder;a company engineer;the board of directors;the CEO of the firm;Which;of the following presents a summary of the changes in a firm?s balance sheet;from the beginning of an accounting period to the end of that accounting;period?;The statement of cash flows.;The statement of retained earnings.;The statement of working capital.;The statement of net worth.;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;$2,123,612;$803,010;$1,844,022;Multiple Choice;Question 63;Efficiency ratio: Gateway Corp. has an inventory turnover ratio;of 5.6. What is the firm's days's sales in inventory?;64.3 days;61.7 days;57.9 days;65.2 days;Multiple Choice;Question 70;Leverage ratio: Your firm has an equity multiplier of;2.47. What is its debt-to-equity ratio?;1.47;0;1.74;0.60;Multiple Choice;Question 84;Which of the following;is not a method of ?benchmarking??;Evaluating a single firm?s performance over;time.;Conduct an industry group analysis.;Utilize the DuPont system to analyze a firm?s;performance.;Identify a group of firms that compete with;the company being analyzed.;Multiple Choice;Question 67;Present value: 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.);$26,454;$16,670;$19,444;$22,680;Multiple Choice;Question 62;PV of multiple cash;flows: Ferris, Inc., has;borrowed from their bank at a rate of 8 percent and will repay the loan with;interest over the next five years. Their scheduled payments, starting at the;end of the year are as follows?$450,000, $560,000, $750,000, $875,000, and;$1,000,000. What is the present value of these payments? (Round to the nearest;dollar.);$2,431,224;$2,615,432;$2,735,200;$2,815,885;Multiple Choice;Question 64;PV of multiple cash;flows: 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.);$480,906;$477,235;$429,560;$414,322;Multiple Choice;Question 72;Future value of an;annuity: JayadevAthreya has;started on his first job. He plans to start saving for retirement early. 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? (Round to the nearest dollar.);$5,233,442;$1,745,600;$2,667,904;$3,594,524;Multiple Choice;Question 57;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.);40%;12%;16%;32%;Multiple Choice;Question 62;Bond price: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;$972;$1,066;$1,014;Multiple Choice;Question 57;PV of dividends: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 is 14 percent, what is the;present value of their dividends over the next four years?;$9.72;$13.50;$12.50;$11.63;Multiple Choice;Question 79;Capital rationing.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?;0.90;1.90;1.11;0.11;Multiple Choice;Question 88;What decision criteria;should managers use in selecting projects when there is not enough capital to;invest in all available positive NPV projects?;The modified internal rate of return.;The internal rate of return.;The profitability index.;The discounted payback.;Multiple Choice;Question 60;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?;50%;30%;70%;33%;Multiple Choice;Question 85;If a company's weighted;average cost of capital is less than the required return on equity, then the;firm;Is financed with more than 50% debt;Is perceived to be safe;Must have preferred stock in its capital;structure;Has debt in its capital structure;Multiple Choice;Question 68;The cost of equity: Gangland Water Guns, Inc., is expected to pay;a dividend of $2.10 one year from today. If the firm's growth in dividends is;expected to remain at a flat 3 percent forever, then what is the cost of equity;capital for Gangland if the price of its common shares is currently $17.50?;12.00%;15.36%;14.65%;15.00%;Multiple Choice;Question 32;A firm's capital;structure is the mix of financial securities used to finance its activities and;can include all of the following except;stock.;bonds.;equity options.;preferred stock.;Multiple Choice;Question 54;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 to 60 percent;equity and use the debt proceeds to pay a special dividend to shareholders, how;much debt should they issue?;$600;$321;$375;$225;Multiple Choice;Question 69;Multiple Analysis: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.;$1,315 million;$1,334 million;$453.6 million;$1,787 million;Multiple Choice;Question 86;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?;30.3%;27.3%;32.9%;25.1%;Multiple Choice;Question 46;Which of the following;cannot be engaged in managing the business?;none of these;a general partner;a limited partner;a sole proprietor;Multiple Choice;Question 80;Which of the following;does maximizing shareholder wealth not usually account for?;The timing of cash flows.;Amount of Cash flows.;Government regulation.;Risk.;Multiple Choice;Question 41;The strategic plan;does NOT identify;future mergers, alliances, and divestitures.;the lines of business a firm will compete in.;working capital strategies.;major areas of investment in real assets.;Multiple Choice;Question 67;Firms that achieve;higher growth rates without seeking external financing;are highly leveraged.;have a low plowback ratio.;have less equity and/or are able to generate;high net income leading to a high ROE.;none of these.;Multiple Choice;Question 75;Payout and retention;ratio: Drekker, Inc., has;revenues of $312,766, costs of $220,222, interest payment of $31,477, and a tax;rate of 34 percent. It paid dividends of $34,125 to shareholders. Find the;firm's dividend payout ratio and retention ratio.;85%, 15%;45%, 55%;55%, 45%;15%, 85%;Multiple Choice;Question 30;The cash conversion;cycle;estimates how long it takes on average for the;firm to collect its outstanding accounts receivable balance.;shows how long the firm keeps its inventory;before selling it.;begins when the firm uses its cash to purchase;raw materials and ends when the firm collects cash payments on its credit;sales.;begins when the firm invests cash to purchase;the raw materials that would be used to produce the goods that the firm;manufactures.;Multiple Choice;Question 58;You are provided the;following working capital information for the Ridge Company;Ridge Company;Account;$;Inventory;$12,890;Accounts receivable;12,800;Accounts payable;12,670;Net sales;$124,589;Cost of goods sold;99,630


Paper#47428 | Written in 18-Jul-2015

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