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BUSN379 Finance Questions

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Question;1. Which one of the following actions best matches the primary goal of financial management?;increasing the net working capital while lowering the long-term asset requirements;improving the operating efficiency, thereby increasing the market value of the stock;increasing the firm?s market share;reducing fixed costs and increasing variable costs;increasing the liquidity of the firm by transferring short-term debt into long-term debt;2. Working capital management includes which of the following?;establishing the inventory level;deciding when to pay suppliers;determining the amount of cash needed on a daily basis;establishing credit terms for customers;all of the above;3. Market value is important to the financial manager because;It reflects the value of the asset, based on generally-accepted accounting principles.;Is a crucial component of the balance sheet, and can impact the financial statements.;Market value reflects the amount someone is willing to pay today for an asset.;The market value of an asset reflects its historical cost.;None of the above;4. The income statement reflects;Income and expenses at the time when those items affect the cash flows of a firm.;Income and expenses in accordance with GAAP.;The cash flows in accordance with GAAP.;The flow of cash into and out of a firm during a stated period of time.;The flow of cash into and out of a firm as of a particular date.;5. Telemarket Inc. has sales of $625,000. They paid $43,000 in interest during the year and depreciation was $79,000. Administrative costs were $100,000 and other costs were $160,000. Assuming a tax rate of 35 percent, what is Telemarket?s taxable income?;$157,950;$322,000;$243,000;$200,000;6. Home Best Hardware had $315,000 in taxable income last year. Using the tax rates provided in Table 2.3, what is the marginal tax rate?;35%;39%;34%;32%;7. Pizza A had earnings after taxes of $600,000 in the year 2008, and 300,000 shares outstanding. In year 2009, earnings after taxes increased to $750,000, and 25,000 new shares were issued for a total of 325,000 shares. What is the EPS figure for 2008?;$2.0;$2.21;$0.50;$0.47;8. The income statement reflects;income and expenses at the time when those items affect the cash flows of a firm.;income and expenses in accordance with GAAP.;the cash flows in accordance with GAAP.;the flow of cash into and out of a firm during a stated period of time.;the flow of cash into and out of a firm as of a particular date.;9. Print Imaging has EBIT of $150,000, interest of $30,000, taxes of $50,000, and depreciation of $50,000. What is the company?s operating cash flow?;$120,000;$180,000;$170,000;$150,000;$120,000;10. Mark deposited $1,000 today, in an account that pays eight percent interest, compounded semi-annually. Which one of the following statements is correct concerning this investment?;Mark will earn more interest in year 4 than he will in year 3.;Mark will receive equal interest payments every six months over the life of the investment.;Mark would have earned more interest if he had invested in an account paying 8 percent simple interest.;Mark would have earned more interest if he had invested in an account paying annual interest.;Mark will earn less and less interest each year over the life of the investment.;11. Mr. Smith will receive $7,500 a year for the next 14 years from his trust. If the interest rate on this investment is eight percent, what is the approximate current value of these future payments?;$61,800;$53,500;$113,400;$97,200;12. KED Engineering acquired an additional business unit for $310,000. The seller agreed to accept annual payments of $67,000 at an interest rate of 6.5 percent. How many years will it take KED Engineering to pay for this purchase?;4.70 years;5.68 years;6.21 years;7.84 years;8.12 years;13. Fine Oak Woodworks is considering a project that has cash flows of $6,000, $4,000, and $3,000 for the next three years. If the appropriate discount rate of this project is 10 percent, which of the following statements is true?;The current value of the project?s inflows is $13,000;The approximate current value of the project?s inflows is $11,000;The current value of the project?s inflows cannot be determined;The project should be rejected because its present value is negative;14. You are considering two investments. Investment I is in a software company, and Investment II is an engineering company. The investments offer the following cash flows;Year Software Company Engineering Company;1 $5,000 $15,000;2 $3,000 $8,000;3 $4,000 $9,000;4 $3,600 $11,000;If the appropriate discount rate is 10 percent, what is the approximate present value of the Engineering Company investment?;$33,200;$34,500;$42,000;$43,500;15. North Bank offers you an APR of 13.17 percent compounded monthly, and South Bank offers you an effective rate of 13.75 percent on a business loan. Which bank should you choose and why?;South Bank because its effective rate is higher.;North Bank because the APR is lower.;South Bank because its effective rate is lower.;North Bank because its effective rate is lower.

 

Paper#47539 | Written in 18-Jul-2015

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