This document appears to be a study guide or list of questions for a final exam in FIN 370. It includes 30 multiple choice or short answer questions covering various topics in finance, including: the goals of firms, primary and secondary markets, agency theory, principles of financial management, cash budgets, break-even analysis, present value, sources of financing, capital budgeting techniques like payback period and NPV, cost of capital calculation, capital structure, leverage, and international finance topics.
Experiencia de la Junta de Agua San Francisco. Honduras.
Presentado en la II Feria de Manejo Comunitario del Agua y Saneamiento en Granada, Nicaragua. Marzo 2013.
My presentation from SMX Toronto 2013 on the "Social Sites You Shouldn't Overlook" panel, detailing how to successfully use Tumblr for social media marketing and SEO.
Experiencia de la Junta de Agua San Francisco. Honduras.
Presentado en la II Feria de Manejo Comunitario del Agua y Saneamiento en Granada, Nicaragua. Marzo 2013.
My presentation from SMX Toronto 2013 on the "Social Sites You Shouldn't Overlook" panel, detailing how to successfully use Tumblr for social media marketing and SEO.
STR 581 Capstone Final Examination Part 2 - Studentehelpstudent ehelp
Learn more at lower prices, Course STR 581 Capstone Final Examination, Part Two with entire test paper are offered. You can also choose according to your syllabus of STR 581 Capstone Final Examination.
Financial Analysis and Decision MakingMake sure all work is legi.docxvoversbyobersby
Financial Analysis and Decision Making
Make sure all work is legible and all work is shown for problems 16 – 27.
FOR MULTIPLE CHOICE, HIGHLIGHT OR BOLD YOUR RESPONSE
1. Moshen Corporation just announced that its net income was lower than last year. Nevertheless, analysts estimate that the company’s net cash flow increased. What factors could explain this inconsistency?
a. The company’s depreciation expense increased.
b. The company’s interest expense declined.
c. The company had an increase in its non-cash revenues.
d. Answers a and b are correct.
e. Answers b and c are correct.
2.
Rivers Edge Inc. has annual sales of $737,000. Earnings before interest and taxes is equal to 21 percent of sales. For the period, the firm paid $7,900 in interest. What is the profit margin if the tax rate is 35 percent?
a. 12.46 percent
b. 12.95 percent
c. 13.33 percent
d. 15.29 percent
e. 16.11 percent
3.
Of the following activities, which will increase cash?
a. increasing inventory
b. repurchasing shares of stock
c. increasing accounts payable
d. buying new equipment
e. increasing prepaid taxes
4. All else held constant, which will increase the present value of an annuity?
I. Increase in the number of payments
II. Increase in the interest rate
III. Decrease in the interest rate.
IV. Decrease in the payment amount
a. I and II only
b. I and III only
c. II and IV only
d. I, II, and IV only
e. I, III, and IV only
5.
An investment will pay $3,500 five years from now. If the going interest rate on the 5-year security is 4.25%, how much is it worth today?
a.
$1,928.78
b.$2,030.30
c.
$2,131.81
d.$2,238.40
e.
$2,842.42
6.
Standard deviation measures _____ risk while beta measures _____ risk.
a. systematic; unsystematic
b. unsystematic; systematic
c. total; unsystematic
d. total; systematic
e. asset-specific; market
7.
Forever Memories Corp. just paid an annual dividend of $2.80. The company has increased its dividend by 2.5 percent a year for the past ten years and expects to continue doing so. What will a share of this stock be worth six years from now if the required return is 16 percent?
a. $23.60
b. $24.65
c. $25.08
d. $25.50
e. $26.90
8. Main distinguishing differences between debt and equity capital consist of all of the following EXCEPT:
a. Debtholders have no voice in management so long as the issuer does not
violate stated contractual obligations.
b. Claims on income and assets are as follows: bondholders, preferred
shareholders, common shareholders.
c. Debt has a stated maturity, while equity does not.
d. In terms of tax treatment, common equity is entitled to a tax deduction.
e. Common stockholders have voting rights.
9. The payback period is the length of time it takes an investment to generate sufficient cash flows to enable the project to:
a. produce a positive annual cash flow.
b. produce a positive cash flow from assets.
c. offset its fixed e ...
1. FIN 370 final exam
PLEASE CLICK HERE TO DOWNLOUD28/30
1) The goal of the firm should be
2) An example of a primary market transaction is
3) According to the agency problem, _________ represent the principals of a corporation.
4) Which of the following is a principle of basic financial management?
5) Another name for the acid test ratio is the
6) The accounting rate of return on stockholders� investments is measured by
7) If you are an investor, which of the following would you prefer?
8) The primary purpose of a cash budget is to
9) Which of the following is a non-cash expense?
10) The break-even model enables the manager of a firm to
11) A zero-coupon bond
12) If you have $20,000 in an account earning 8% annually, what constant amount could you withdraw
each year and have nothing remaining at the end of 5 years?
13) At what rate must $400 be compounded annually for it to grow to $716.40 in 10 years?
14) The present value of a single future sum
15) Which of the following is considered to be a spontaneous source of financing?
16) Compute the payback period for a project with the following cash flows, if the company�s discount
rate is 12%.
Initial outlay = $450 Cash flows: Year 1 = $325 Year 2 = $65 Year 3 = $100
17) For the NPV criteria, a project is acceptable if the NPV is __________, while for the profitability
index, a project is acceptable if the profitability index is __________.
18) Which of the following is considered to be a deficiency of the IRR?
19) The firm should accept independent projects if
20) The most expensive source of capital is
21) The cost associated with each additional dollar of financing for investment projects is
22) The XYZ Company is planning a $50 million expansion. The expansion is to be financed by selling
$20 million in new debt and $30 million in new common stock. The before-tax required rate of return on
debt is 9%, and the required rate of return on equity is 14%. If the company is in the 40% tax bracket,
what is the marginal cost of capital?
23) Shawhan Supply plans to maintain its optimal capital structure of 30% debt, 20% preferred stock,
and 50% common stock far into the future. The required return on each component is: debt�10%;
preferred stock�11%; and common stock�18%. Assuming a 40% marginal tax rate, what after-tax rate
of return must Shawhan Supply earn on its investments if the value of the firm is to remain unchanged?
24) Lever Brothers has a debt ratio (debt to assets) of 40%. Management is wondering if its current
capital structure is too conservative. Lever Brothers� present EBIT is $3 million, and profits available to
common shareholders are $1,560,000, with 342,857 shares of common stock outstanding. If the firm
were to instead have a debt ratio of 60%, additional interest expense would cause profits available to
stockholders to decline to $1,440,000, but only 228,571 common shares would be outstanding. What is
the difference in EPS at a debt ratio of 60% versus 40%?
25) Zybeck Corp. projects operating income of $4 million next year. The firm�s income tax rate is 40%.
Zybeck presently has 750,000 shares of common stock which have a market value of $10 per share, no
preferred stock, and no debt. The firm is considering two alternatives to finance a new product: (a) the
issuance of $6 million of 10% bonds, or (b) the issuance of 60,000 new shares of common stock. If
Zybeck issues common stock this year, what will be the projected EPS next year?
26) _________ risk is generally considered only a paper gain or loss.
27) Capital markets in foreign countries
28) Buying and selling in more than one market to make a riskless profit is called
29) What keeps foreign exchange quotes in two different countries in line with each other?
30) One reason for international investment is to reduce