FIN 571 Quiz Week 1 to 6
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FIN 571 Week 1 Quiz
1. Which of the following business organizational forms subjects the owner(s) to unlimited liability?
2. Which of the following business organizational forms is easiest to raise capital?
3. Which organizational form best enables the owners of the firm to monitor the actions of other owners of the same firm?
4. Which of the following factors or activities can be controlled by the management of the firm?
5. The legal system and market forces impose substantial costs on individuals and institutions that engage in unethical behavior.
6. The most common reason that corporate firms use the futures and options markets is
7. Galan Associates prepared its financial statement for 2008 based on the information given here.
9. Which of the following best represents cash flows to investors?
FIN 571 Week 2 Quiz
1. Which one of the following statements about trend analysis is NOT correct?
2. Coverage ratios: Sectors, Inc., has an EBIT of $7,221,643 and interest expense of $611,800. Its depreciation for the year is $1,434,500. What is its cash coverage ratio?
3. Multiples analysis: Turner Corp. has debt of $230 million and generated a net income of $121 million in the last fiscal year.
4. Coverage ratios, like times interest earned and cash coverage ratio, allow
5. Peer group analysis can be performed by 6. Efficiency ratio: If Viera, Inc., has an accounts receivable turnover of 3.9 times and net sales of $3,436,812, what is its level of receivables?
FIN 571 Week 3 Quiz
1. You are provided the following working capital information for the Ridge Company: What is the operating cycle for Ridge Company?
2. The operating cycle
3. Ticktock Clocks sells 10,000 alarm clocks each year. If the total cost of placing an order is $65 and it costs $85 per year to carry the alarm clock in inventory, use the EOQ formula to calculate the optimal order size.
4. The asset substitution problem occurs when
5. 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.
6. Melba's Toast has a capital structure with 30% debt and 70% equity. Its pretax cost of debt is 6%, and its cost of equity is 10%. The firm's marginal corporate income tax rate is 35%. What is the appropriate WACC?
7. According to the text, the financial plan covers a period of
8. The financing plan of a firm will indicate
FIN 571 Week 4 Quiz
1. Present value: Tommie Harris is considering an investment that pays 6.5 percent annually. How much must he invest today such that he will have $25,000 in seven years? (Round to the nearest dollar.)
2. PV of multiple cash flows: Jack Stuart has loaned money to his brother at an interest rate of 5.75 percent.
3. PV of multiple cash flows: Hassan Ali has made an investment that will pay him $11,455, $16,376, and $19,812 at the end of the next three years. His investment was to fetch him a return of 14 percent. What is the present value of these cash flows?
4. PV of multiple cash flows: Pam Gregg is expecting cash flows of $50,000, $75,000, $125,000, and $250,000 from an inheritance over the next four years.
5. Present value of an annuity: Transit Insurance Company has made an investment in another company that will guarantee it a cash flow of $37,250 each year for the next five years.
6. Future value of an annuity: Carlos Menendez is planning to invest $3,500 every year for the next six years in an investment paying 12 percent annually.
7. Bond price: Briar Corp is issuing a 10-year bond with a coupon rate of 7 percent. The interest rate for similar bonds is currently 9 percent. Assuming annual payments,
8. PV of dividends: Cortez, Inc., is expecting to pay out a dividend of $2.50 next year. After that it expects its dividend to grow at 7 percent for the next four years.
FIN 571 Week 5 Quiz
1. Genaro needs to capture a return of 40 percent for his one-year investment in a property. He believes that he can sell the property at the end of the year for
2. The process of identifying the bundle of projects that creates the greatest total value and allocating the available capital to the projects is known as
3. You are considering a project that has an initial cost of $1,200,000. If you take the project, it will produce net cash flows of $300,000 per year for the next six years. If the appropriate discount rate for the project is 10 percent,
3. What might cause a firm to face capital rationing?
4. The WACC for a firm is 19.75 percent. You know that the firm is financed with $75 million of equity and $25 million of debt. The cost of debt capital is 7 percent. What is the cost of equity for the firm?
5. Bellamee, Inc., has semiannual bonds outstanding with five years to maturity and are priced at $920.87. If the bonds have a coupon rate of 7 percent, then what is the YTM for the bonds?
FIN 571 Week 6 Quiz
1. Planning models that are more sophisticated than the percent of sales method have