Which of the following is considered a hybrid organizational form? limited liability partnership corporation sole proprietorship partnership Which of the following is a principal within the agency relationship? the board of directors the CEO of the firm a shareholder a company engineer 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? 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 net worth. The statement of retained earnings. The statement of working capital. The statement of cash flows. Efficiency ratio: Gateway Corp. has an inventory turnover ratio of 5.6. What is the firm's days's sales in inventory? 61.7 days 57.9 days 65.2 days 64.3 days IE Leverage ratio: Your firm has an equity multiplier of 2.47. What is its debt-to-equity ratio? 0 1.74 0.60 1.47 Which of the following is not a method of “benchmarking”? Evaluating a single firm’s performance over time. Conduct an industry group analysis. Identify a group of firms that compete with the company being analyzed. Utilize the DuPont system to analyze a firm’s performance. 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.) $26,454 $16,670 $19,444 $22,680 IE 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.) $2,815,885 $2,735,200 $2,431,224 $2,615,432 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.) $477,235 $429,560 $414,322 $480,906 IE 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.) $2,667,904 $5,233,442 $1,745,600 $3,594,524 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.

1. Which of the following is considered a hybrid organizational
form?
limited liability partnership
corporation
sole proprietorship
partnership
Which of the following is a principal within the agency
relationship?
the board of directors
the CEO of the firm
a shareholder
a company engineer
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. 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 net worth.
The statement of retained earnings.
The statement of working capital.
The statement of cash flows.
Efficiency ratio: Gateway Corp. has an inventory turnover ratio
of 5.6. What is the firm's days's sales in inventory?
61.7 days
57.9 days
65.2 days
64.3 days
IE
Leverage ratio: Your firm has an equity multiplier of 2.47.
What is its debt-to-equity ratio?

3. 0
1.74
0.60
1.47
Which of the following is not a method of “benchmarking”?
Evaluating a single firm’s performance over time.
Conduct an industry group analysis.
Identify a group of firms that compete with the company being
analyzed.
Utilize the DuPont system to analyze a firm’s performance.
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.)
$26,454
$16,670
$19,444
$22,680
IE

4. 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.)
$2,815,885
$2,735,200
$2,431,224
$2,615,432
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.)
$477,235
$429,560
$414,322
$480,906

5. IE
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.)
$2,667,904
$5,233,442
$1,745,600
$3,594,524
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.)
32%
16%
12%

6. 40%
IE
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.)
$923
$1,014
$972
$1,066
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
Capital rationing. TuleTime Comics is considering a new show

7. 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?
0.90
0.11
1.90
1.11
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 profitability index.
The discounted payback.
The internal rate of return.
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?
30%

8. 33%
50%
70%
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?
14.65%
15.00%
15.36%
12.00%
If a company's weighted average cost of capital is less than the
required return on equity, then the firm:
Has debt in its capital structure
Is perceived to be safe
Must have preferred stock in its capital structure
Is financed with more than 50% debt
IE

9. 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.
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?
$321
$225
$375
$600
Multiple Analysis: Turnbull Corp. had an EBIT of $247 million
in the last fiscal year. Its depreciation and amortization

10. 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
$453.6 million
$1,787 million
$1,315 million
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?
32.9%
30.3%
25.1%
27.3%
Which of the following cannot be engaged in managing the
business?

11. a general partner
a sole proprietor
none of these
a limited partner
Which of the following does maximizing shareholder wealth not
usually account for?
Risk.
Amount of Cash flows.
Government regulation.
The timing of cash flows.
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.
Firms that achieve higher growth rates without seeking external
financing

12. have a low plowback ratio.
have less equity and/or are able to generate high net income
leading to a high ROE.
none of these.
are highly leveraged.
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.
15%, 85%
85%, 15%
45%, 55%
55%, 45%
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.
begins when the firm uses its cash to purchase raw materials
and ends when
the firm collects cash payments on its credit sales.

13. shows how long the firm keeps its inventory before selling it.
estimates how long it takes on average for the firm to collect its
outstanding
accounts receivable balance.
IE
IE
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

14. 46.4 days
83.5 days
38.3 days
IE
PAD 3330
Spring 2016
ULI Advisory Services Panel Report
Study Guide
1. Why does the ULI panel call Clearwater a divided city? Do
you agree?
2. What are the major points of the strategy, communication and
partnership issues?
3. Do you agree or disagree with the economic analysis in the
section on market potential? Why or why not?
4. The Planning, Development and Design Strategies are found
on pages 18-30. Answer the following questions about the
strategies.
a. Which five strategies do you think have the best chance of
success?
b. Which three strategies do you think will be the most difficult
to undertake?
c. Which five strategies do you think Clearwater should address

15. first?
5. Which groups/organizations will play a role in implementing
the report recommendations? How can the groups work
together?
6. What citizen participation technique was used to formulate
this report?
7. What parts of a typical comprehensive plan have been
included in the report? Which have been omitted? Why do you
think some parts have been omitted?