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Question 1 1 / 1 point Which of the following cannot be engaged in managing the

Question 1 1 / 1 point Which of the following cannot be engaged in managing the

Question 1 1
/ 1 point
Which of the following cannot be engaged in managing the
business?

a limited partner

a general partner

a sole proprietor

none of these
Question 2 1
/ 1 point
One reason for the existence of agency problems between
managers and share holders is that:

managers know how to manage the firm better than
shareholders.

there is a separation of ownership and control of the firm.

shareholders have unreasonable expectations about managerial
performance.

none of these.
Question 3 1
/ 1 point
On June 23, 2008, Mikhal Cosmetics sold $250,000 worth of its products to Rynex Corporation, with the payment to be
made in 90 days on September 20. The
goods were shipped to Rynex on July 2. The firm’s accountants should recognize the sale on

June 23, 2008.

July 2, 2008.

September 20, 2008.

none of the above
Question 4 1
/ 1 point
During the last year, Sigma Co had Net Income of $160, paid
$15 in dividends, and sold new stock for $34. Beginning equity for the year was
$630. Ending equity was
Question 5 1
/ 1 point
The following items are components of a traditional balance
sheet. How much are the total assets of the firm?

Plant and equipment $43,000
Common stock 15,000
Cash 7,400
Inventory
24,300
Bad debt reserve 6,000
Paid in excess 6,000
Accumulated depreciation
29,000
Accounts receivable
22,000
Question 6 1
/ 1 point
Brighton Corp. bought an oil rig exactly 6 years ago for
$120,000,000. Brighton depreciates oil rigs straight line over 10 years
assuming no salvage value. (Straight line depreciation means that the yearly
depreciation will be the purchase price of the oil rig divided by the number of
years it will last, which is 10 years here). The rig was just sold to British
Petroleum for $29,000,000. What Capital Gain/Loss will Brighton report on this
transaction?
Question 7 1
/ 1 point
Walker Corporation conducted the following activities during
2001: (1) they sold 10,000 shares of their own stock for $16.00 per share; (2)
they issued bonds for which they received $497,000; (3) they paid dividends to
their stockholders totaling $82,000; (4) they sold a piece of equipment for
$50,000 that they were carrying on their books for $20,000; (5) they earned net
income of $140,000. What would be shown on the Statement of Cash Flows for
Cash from financing activities based on the information above?
Question 8 1
/ 1 point
Given the following selected information on Cicaleses
Chocolate, Inc., calculate Cash Flow from Operating Activities for 2001.

Last Year This Year
EAT $ 600,000 $ 740,000
Depreciation Exp.
100,000 110,000
Dividends
400,000 550,000
Accounts Receivable 1,500,000 2,000,000
Inventory 3,500,000 2,000,000
Accts. Payable/Accr.
350,000 500,000
Long-Term Debt 2,300,000 3,000,000
Common Stock 2,200,000 2,500,000
Retained Earnings 6,150,000 6,350,000

Question 9 1
/ 1 point
Cameron Balance Sheet
Accounts Payable 34

Accounts Receivable 62

Accruals 26

Accumulated Depreciation (175)
Cash 30
Common Stock 120
Fixed Assets (gross) 390

Inventory 132

Long-Term Debt 200

Retained Earnings 65

What is Cameron Inc.s Net Working Capital?

Question 10 1
/ 1 point
A firms current ratio is 1.5, and its quick ratio is 1.0.
If its current liabilities are $12,500, what are its inventories?
Question 11 1
/ 1 point
Iris Income Statement
Cost of Goods Sold 350
Depreciation Expense 35
Interest Expense 20
Operating Expense (excluding depreciation) 115
Sales 660

What was Iris Inc.s
earnings before interest and
taxes (EBIT)?
Question 12 1
/ 1 point
Iris Balance Sheet
Accounts Payable 35

Accounts Receivable 62
Accruals 30

Accumulated Depreciation (175)
Cash 31
Common Stock 120
Fixed Assets (gross) 390

Inventory 122

Long-Term Debt 200

Retained Earnings 65

What is Iris Inc.s
Total Assets?

Question 13 1
/ 1 point
If firm A has a higher debt-to-equity ratio than firm B,
then

firm A has a lower equity multiplier than firm B.

firm B has lower financial leverage than firm A.

firm B has a lower equity multiplier than firm A.

none of the above
Question 14 1
/ 1 point
Flying Tigers, Inc.,
has net sales of $722,000 and accounts
receivables of $156,000. What is the firm’s accounts receivables turnover? (Give your answer upto two decimal
places)
Question 15 1
/ 1 point
Reagan Corp. has reported a net income of $810,600 for the
year. The company’s share price is
$13.69, and the company has 321,880 shares outstanding. Compute the firm’s price-earnings ratio upto two decimal
places.
Question 16 1
/ 1 point
You purchased a piece of property for $30,000 nine years ago
and sold it today for $83,190. What was the annual rate of return on your
investment?

9%

10%

11%

12%
Question 17 1
/ 1 point
The First National Bank has agreed to lend you
$30,000 today, but you must repay $42,135 in 3 years. What
rate is the bank is charging you?

13%

12%

11%

10%
Question 18 1
/ 1 point
The Florida lottery agrees to pay the winner $288,000 at the
end of each year for the next 20 years. What is the future value of this prize
if each payment is put in an account earning 0.09?
Question 19 1
/ 1 point
Which of the following is not a Fundamental Decision of
Financial Management?

The capital budgeting decision

The macroeconomic management decision

The financing decision

Working capital management decision
Question 20 1
/ 1 point
Which of the following is least likely to be part of an
Annual Report?

financial tables

discussions of the firms product lines, its services to its
customers, and its contributions to the communities in which it operates

audited financial statements

ratio analysis of other firms in the same industryQuestion 1 1
/ 1 pointWhat is the future value of $1,500, placed in a saving
account for four years if the account pays 0.10, compounded quarterly? (Your
answer should be correct to two decimal places.)Question 2 0
/ 1 pointYour brother, who is 6 years old, just received a trust fund
that will be worth $22,000 when he is 21 years old. If the fund earns 0.10
interest compounded annually, what is the value of the fund today? Question 3 0
/ 1 pointIf you were to borrow $8,200 over five years at 0.10
compounded monthly, what would be your monthly payment? Question 4 1
/ 1 pointYour uncle promises to give you $500 per quarter for the next
five years. How much is his promise worth right now if the interest rate is
0.08 compounded quarterly?Question 5 1
/ 1 pointA stock has an expected return of 0.08 and a variance of
0.23. What is Its coefficient of variation? Question 6 1
/ 1 pointUse the following information to calculate your companys
expected return. State Probability ReturnBoom 20% 0.35Normal 60% 0.10Recession 20% -0.15Question 7 1
/ 1 pointYou have invested in stocks J and M. From the following
information, determine the beta for your portfolio. Expected Amount of
Return Investment BetaStock J 0.11 $100,000 1.20Stock M 0.11 $300,000 0.60Question 8 1
/ 1 pointFrazier Manufacturing paid a dividend last year of$2, which is expected to grow at a constant rate of 5%.
Frazier has a beta of1.3. If the market is returning 11% and the risk-free rate
is 4%, calculate thevalue of Fraziers stock. $25.93 $31.33 $38.53 $41.63Question 9 1
/ 1 pointYou have invested 30 percent of your portfolio in Jacob,
Inc., 40 percent in Bella Co., and 30
percent in Edward Resources. What is the expected return of your portfolio if Jacob, Bella, and Edward
have expected returns of 0.09, 0.12, and 0.05, respectfully?Question 10 1
/ 1 pointThe covariance of the returns between Willow Stock and Sky
Diamond Stock is 0.0870. The variance of Willow is 0.1190, and the variance of
Sky Diamond is 0.1470. What is the correlation coefficient between the returns
of the two stocks?Question 11 1
/ 1 pointA project has the following cash flows: 0 1
2 3($500) $100.00 $200 $290.00 What is the projects NPV if the interest rate is $6%?Question 12 1
/ 1 pointMedela’s Entertainment Systems is setting up to manufacture
a new line of video game consoles. The cost of the manufacturing equipment is
$1,750,000. Expected cash flows over the next four years are $725,000,
$850,000, $1,200,000, and $1,500,000. Given the company’s required rate of
return of 15 percent, what is the NPV of this project? $1,169,806 $2,919,806 $4,669,806 $3,122, 607Question 13 1
/ 1 pointA project requires an initial outlay of $100,000, and is
expected to generate annual net cash inflows of $28,000 for the next 5
years. Determine the payback period for
the project. .28 years 1.4 years 3.57 years 17.86 years View FeedbackQuestion 14 1
/ 1 pointAn investment project requires an initial outlay of
$100,000, and is expected to generate annual cash inflows of $28,000 for the
next 5 years. (round to the nearest
tenth of the percentage) Determine the (Internal Rate of Return) IRR for the
project using a financial calculator 12.0% 3.6% 12.6% 12.4% View FeedbackQuestion 15 1
/ 1 pointCapital budgeting analysis of mutually exclusive projects A
and B yields the following: Project A Project BIRR 18% 22%NPV $270,000 $255,000Payback Period 2.5 yrs 2.0 yrsManagement should choose: Project B because most executives prefer the IRR method Project B because two out of three methods choose it Project A because NPV is the best method either project because the results arent consistentQuestion 16 1
/ 1 pointChristopher Electronics bought new machinery for $5,015,000
million. This is expected to result in additional cash flows of $1,205,000
million over the next 7 years. What is the payback period for this
project? Their acceptance period is five
years.Question 17 1
/ 1 pointAMP, Inc., has invested $2,165,800 on equipment. The firm
uses payback period criteria of not accepting any project that takes more than
four years to recover costs. The company anticipates cash flows of $454,386,
$512,178, $561,755, $764,997, $816,500, and $825,375 over the next six years.
What is the payback period?Question 18 1
/ 1 point18) A common-size financial statement is one in which each
number is expressed as a percentage of some base number for the firm (such as
total assets or revenues) as a percentage of an industry average (such as rate of
return) as a percentage of a stock market average (such as market
capitalization) as a percentage of a national average (such as per capita
GDP)Question 19 1
/ 1 pointReturn on Equity (ROE) is defined as: Gross Income / Total Assets Revenues / Total Debt Net Income / Stockholders Equity (Revenues COGS) / Total LiabilitiesQuestion 20 1
/ 1 pointWhich of the following ratios is incorrect? Current ratio = Current assets / Current liabilities Quick ratio = (Current assets Inventory) / Current
liabilities Inventory turnover = (Cost of goods sold) / Inventory Days Sales Outstanding = 365 / Accounts payable turnover

________________________________________
Question 1 1
/ 1 pointWhich of the following cannot be engaged in managing the
business? a limited partner a general partner a sole proprietor none of theseQuestion 2 1
/ 1 pointOne reason for the existence of agency problems between
managers and share holders is that: managers know how to manage the firm better than
shareholders. there is a separation of ownership and control of the firm. shareholders have unreasonable expectations about managerial
performance. none of these.Question 3 1
/ 1 pointOn June 23, 2008, Mikhal Cosmetics sold $250,000 worth of its products to Rynex Corporation, with the payment to be
made in 90 days on September 20. The
goods were shipped to Rynex on July 2. The firm’s accountants should recognize the sale on June 23, 2008. July 2, 2008. September 20, 2008. none of the aboveQuestion 4 1
/ 1 pointDuring the last year, Sigma Co had Net Income of $160, paid
$15 in dividends, and sold new stock for $34. Beginning equity for the year was
$630. Ending equity wasQuestion 5 1
/ 1 pointThe following items are components of a traditional balance
sheet. How much are the total assets of the firm? Plant and equipment $43,000Common stock 15,000Cash 7,400Inventory
24,300Bad debt reserve 6,000Paid in excess 6,000Accumulated depreciation
29,000Accounts receivable
22,000Question 6 1
/ 1 pointBrighton Corp. bought an oil rig exactly 6 years ago for
$120,000,000. Brighton depreciates oil rigs straight line over 10 years
assuming no salvage value. (Straight line depreciation means that the yearly
depreciation will be the purchase price of the oil rig divided by the number of
years it will last, which is 10 years here). The rig was just sold to British
Petroleum for $29,000,000. What Capital Gain/Loss will Brighton report on this
transaction?Question 7 1
/ 1 pointWalker Corporation conducted the following activities during
2001: (1) they sold 10,000 shares of their own stock for $16.00 per share; (2)
they issued bonds for which they received $497,000; (3) they paid dividends to
their stockholders totaling $82,000; (4) they sold a piece of equipment for
$50,000 that they were carrying on their books for $20,000; (5) they earned net
income of $140,000. What would be shown on the Statement of Cash Flows for
Cash from financing activities based on the information above?Question 8 1
/ 1 pointGiven the following selected information on Cicaleses
Chocolate, Inc., calculate Cash Flow from Operating Activities for 2001. Last Year This YearEAT $ 600,000 $ 740,000Depreciation Exp.
100,000 110,000Dividends
400,000 550,000Accounts Receivable 1,500,000 2,000,000Inventory 3,500,000 2,000,000Accts. Payable/Accr.
350,000 500,000Long-Term Debt 2,300,000 3,000,000Common Stock 2,200,000 2,500,000Retained Earnings 6,150,000 6,350,000 Question 9 1
/ 1 pointCameron Balance Sheet Accounts Payable 34
Accounts Receivable 62
Accruals 26
Accumulated Depreciation (175)Cash 30 Common Stock 120 Fixed Assets (gross) 390
Inventory 132
Long-Term Debt 200
Retained Earnings 65
What is Cameron Inc.s Net Working Capital? Question 10 1
/ 1 pointA firms current ratio is 1.5, and its quick ratio is 1.0.
If its current liabilities are $12,500, what are its inventories?Question 11 1
/ 1 pointIris Income Statement Cost of Goods Sold 350Depreciation Expense 35Interest Expense 20Operating Expense (excluding depreciation) 115Sales 660 What was Iris Inc.s
earnings before interest andtaxes (EBIT)?Question 12 1
/ 1 pointIris Balance Sheet Accounts Payable 35
Accounts Receivable 62Accruals 30
Accumulated Depreciation (175)Cash 31 Common Stock 120 Fixed Assets (gross) 390
Inventory 122
Long-Term Debt 200
Retained Earnings 65
What is Iris Inc.s
Total Assets? Question 13 1
/ 1 pointIf firm A has a higher debt-to-equity ratio than firm B,
then firm A has a lower equity multiplier than firm B. firm B has lower financial leverage than firm A. firm B has a lower equity multiplier than firm A. none of the aboveQuestion 14 1
/ 1 point Flying Tigers, Inc.,
has net sales of $722,000 and accounts
receivables of $156,000. What is the firm’s accounts receivables turnover? (Give your answer upto two decimal
places)Question 15 1
/ 1 pointReagan Corp. has reported a net income of $810,600 for the
year. The company’s share price is
$13.69, and the company has 321,880 shares outstanding. Compute the firm’s price-earnings ratio upto two decimal
places.Question 16 1
/ 1 pointYou purchased a piece of property for $30,000 nine years ago
and sold it today for $83,190. What was the annual rate of return on your
investment? 9% 10% 11% 12%Question 17 1
/ 1 pointThe First National Bank has agreed to lend you$30,000 today, but you must repay $42,135 in 3 years. What
rate is the bank is charging you? 13% 12% 11% 10%Question 18 1
/ 1 pointThe Florida lottery agrees to pay the winner $288,000 at the
end of each year for the next 20 years. What is the future value of this prize
if each payment is put in an account earning 0.09?Question 19 1
/ 1 pointWhich of the following is not a Fundamental Decision of
Financial Management? The capital budgeting decision The macroeconomic management decision The financing decision Working capital management decisionQuestion 20 1
/ 1 pointWhich of the following is least likely to be part of an
Annual Report? financial tables discussions of the firms product lines, its services to its
customers, and its contributions to the communities in which it operates audited financial statements ratio analysis of other firms in the same industryQuestion 1 1
/ 1 pointWhat is the future value of $1,500, placed in a saving
account for four years if the account pays 0.10, compounded quarterly? (Your
answer should be correct to two decimal places.)Question 2 0
/ 1 pointYour brother, who is 6 years old, just received a trust fund
that will be worth $22,000 when he is 21 years old. If the fund earns 0.10
interest compounded annually, what is the value of the fund today? Question 3 0
/ 1 pointIf you were to borrow $8,200 over five years at 0.10
compounded monthly, what would be your monthly payment? Question 4 1
/ 1 pointYour uncle promises to give you $500 per quarter for the next
five years. How much is his promise worth right now if the interest rate is
0.08 compounded quarterly?Question 5 1
/ 1 pointA stock has an expected return of 0.08 and a variance of
0.23. What is Its coefficient of variation? Question 6 1
/ 1 pointUse the following information to calculate your companys
expected return. State Probability ReturnBoom 20% 0.35Normal 60% 0.10Recession 20% -0.15Question 7 1
/ 1 pointYou have invested in stocks J and M. From the following
information, determine the beta for your portfolio. Expected Amount of
Return Investment BetaStock J 0.11 $100,000 1.20Stock M 0.11 $300,000 0.60Question 8 1
/ 1 pointFrazier Manufacturing paid a dividend last year of$2, which is expected to grow at a constant rate of 5%.
Frazier has a beta of1.3. If the market is returning 11% and the risk-free rate
is 4%, calculate thevalue of Fraziers stock. $25.93 $31.33 $38.53 $41.63Question 9 1
/ 1 pointYou have invested 30 percent of your portfolio in Jacob,
Inc., 40 percent in Bella Co., and 30
percent in Edward Resources. What is the expected return of your portfolio if Jacob, Bella, and Edward
have expected returns of 0.09, 0.12, and 0.05, respectfully?Question 10 1
/ 1 pointThe covariance of the returns between Willow Stock and Sky
Diamond Stock is 0.0870. The variance of Willow is 0.1190, and the variance of
Sky Diamond is 0.1470. What is the correlation coefficient between the returns
of the two stocks?Question 11 1
/ 1 pointA project has the following cash flows: 0 1
2 3($500) $100.00 $200 $290.00 What is the projects NPV if the interest rate is $6%?Question 12 1
/ 1 pointMedela’s Entertainment Systems is setting up to manufacture
a new line of video game consoles. The cost of the manufacturing equipment is
$1,750,000. Expected cash flows over the next four years are $725,000,
$850,000, $1,200,000, and $1,500,000. Given the company’s required rate of
return of 15 percent, what is the NPV of this project? $1,169,806 $2,919,806 $4,669,806 $3,122, 607Question 13 1
/ 1 pointA project requires an initial outlay of $100,000, and is
expected to generate annual net cash inflows of $28,000 for the next 5
years. Determine the payback period for
the project. .28 years 1.4 years 3.57 years 17.86 years View FeedbackQuestion 14 1
/ 1 pointAn investment project requires an initial outlay of
$100,000, and is expected to generate annual cash inflows of $28,000 for the
next 5 years. (round to the nearest
tenth of the percentage) Determine the (Internal Rate of Return) IRR for the
project using a financial calculator 12.0% 3.6% 12.6% 12.4% View FeedbackQuestion 15 1
/ 1 pointCapital budgeting analysis of mutually exclusive projects A
and B yields the following: Project A Project BIRR 18% 22%NPV $270,000 $255,000Payback Period 2.5 yrs 2.0 yrsManagement should choose: Project B because most executives prefer the IRR method Project B because two out of three methods choose it Project A because NPV is the best method either project because the results arent consistentQuestion 16 1
/ 1 pointChristopher Electronics bought new machinery for $5,015,000
million. This is expected to result in additional cash flows of $1,205,000
million over the next 7 years. What is the payback period for this
project? Their acceptance period is five
years.Question 17 1
/ 1 pointAMP, Inc., has invested $2,165,800 on equipment. The firm
uses payback period criteria of not accepting any project that takes more than
four years to recover costs. The company anticipates cash flows of $454,386,
$512,178, $561,755, $764,997, $816,500, and $825,375 over the next six years.
What is the payback period?Question 18 1
/ 1 point18) A common-size financial statement is one in which each
number is expressed as a percentage of some base number for the firm (such as
total assets or revenues) as a percentage of an industry average (such as rate of
return) as a percentage of a stock market average (such as market
capitalization) as a percentage of a national average (such as per capita
GDP)Question 19 1
/ 1 pointReturn on Equity (ROE) is defined as: Gross Income / Total Assets Revenues / Total Debt Net Income / Stockholders Equity (Revenues COGS) / Total LiabilitiesQuestion 20 1
/ 1 pointWhich of the following ratios is incorrect? Current ratio = Current assets / Current liabilities Quick ratio = (Current assets Inventory) / Current
liabilities Inventory turnover = (Cost of goods sold) / Inventory Days Sales Outstanding = 365 / Accounts payable turnover
________________________________________

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