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UOP FIN571 final exam Spring 2014




Question;Multiple Choice Question 51;Which of the following is considered a;hybrid organizational form?;partnership;sole proprietorship;corporation;limited liability partnership;Multiple Choice Question 59;Which of the following is a principal within;the agency relationship?;the board of directors;a shareholder;a company engineer;the CEO of the firm;Multiple Choice Question 57;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 78;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 working capital.;The statement of retained earnings.;The statement of cash flows.;The statement of net worth.;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?;57.9 days;65.2 days;61.7 days;64.3 days;Multiple Choice Question 70;Leverage ratio: Your firm has an equity multiplier of 2.47.;What is its debt-to-equity ratio?;1.74;1.47;0.60;0;Multiple Choice Question 84;Which of the following is not a method;of ?benchmarking??;Evaluating a single firm?s performance over time.;Utilize the DuPont system to analyze a firm?s;performance.;Conduct an industry group analysis.;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.);$22,680;$26,454;$16,670;$19,444;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;$2,815,885;$2,735,200;$2,615,432;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: Jayadev Athreya 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.);$1,745,600;$2,667,904;$3,594,524;$5,233,442;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.);$972;$1,066;$923;$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?;$13.50;$9.72;$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?;0.11;1.90;0.90;1.11;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 discounted payback.;The profitability index.;The internal rate of return.;ultiple 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?;33%;70%;50%;30%;ultiple 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?;15.36%;15.00%;14.65%;12.00%;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 perceived to be safe;Has debt in its capital structure;Must have preferred stock in its capital;structure;Is financed with more than 50% debt;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;$225;$375;$321;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.;$1,334 million;$1,315 million;$453.6 million;$1,787 million;ultiple 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?;27.3%;32.9%;25.1%;30.3%;Multiple Choice Question 46;Which of the following cannot be;engaged in managing the business?;a general partner;a limited partner;a sole proprietor;none of these;Multiple Choice Question 80;Which of the following does maximizing;shareholder wealth not usually account for?;Government regulation.;The timing of cash flows.;Amount of Cash flows.;Risk.;Multiple Choice Question 41;The strategic plan does NOT identify;working capital strategies.;the lines of business a firm will compete in.;major areas of investment in real assets.;future mergers, alliances, and divestitures.;Multiple Choice Question 67;Firms that achieve higher growth rates;without seeking external financing;are highly leveraged.;none of these.;have less equity and/or are able to generate high;net income leading to a high ROE.;have a low plowback ratio.;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 $34,125 to shareholders. Find the firm's dividend payout;ratio and retention ratio.;85%, 15%;45%, 55%;55%, 45%;15%, 85%;Multiple Choice Question 30;The cash conversion cycle;begins when the firm invests cash to purchase the;raw materials that would be used to produce the goods that the firm;manufactures.;shows how long the firm keeps its inventory;before selling it.;begins when the firm uses its cash to purchase;raw materials and ends when the firm collects cash payments on its credit;sales.;estimates how long it takes on average for the;firm to collect its outstanding accounts receivable balance.;Multiple Choice Question 58;You are provided the following working;capital information for the Ridge Company;Ridge Company;Account;$;Inventory;$12,890;Accounts receivable;12,800;Accounts payable;12,670;Net sales;$124,589;Cost of goods sold;99,630;Cash conversion cycle: What is the cash conversion cycle for Ridge;Company?;129.9 days;83.5 days;38.3 days;46.4 days


Paper#49366 | Written in 18-Jul-2015

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