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FIN 571 Week 6 Finals EXAM Quiz (****** 30/30 Right ******)
1. Which of the next is taken into account a hybrid organizational kind?
• sole proprietorship
• restricted legal responsibility partnership
2. Which of the next is a principal inside the company relationship?
• the CEO of the agency
• the board of administrators
• an organization engineer
• a shareholder
three. Which of the next presents a abstract of the adjustments in a agency’s steadiness sheet from the start of an accounting interval to the tip of that accounting interval?
• The assertion of retained earnings.
• The assertion of working capital.
• The assertion of money flows.
• The assertion of web price.
four. Teakap, Inc., has present property of $ 1,456,312 and whole property of $four,812,369 for the 12 months ending September 30, 2006. It additionally has present liabilities of $1,041,zero12, frequent fairness of $1,500,000, and retained earnings of $1,468,347. How a lot long-term debt does the agency have?
5. Gateway Corp. has a listing turnover ratio of 5.6. What’s the agency’s days’s gross sales in stock?
6. Your agency has an fairness multiplier of two.47. What’s its debt-to-equity ratio?
7. Which of the next isn’t a technique of “benchmarking”?
• Conduct an trade group evaluation.
• Establish a bunch of companies that compete with the corporate being analyzed.
• Make the most of the DuPont system to investigate a agency’s efficiency.
• Evaluating a single agency’s efficiency over time.
eight. Jack Robbins is saving for a brand new automotive. He must have $ 21,000 for the automotive in three years. How a lot will he have to take a position as we speak in an account paying eight % yearly to realize his goal? (Spherical to nearest greenback.)
9. Ferris, Inc., has borrowed from their financial institution at a charge of eight % and can repay the mortgage with curiosity over the subsequent 5 years. Their scheduled funds, beginning on the finish of the 12 months are as follows—$450,000, $560,000, $750,000, $875,000, and $1,000,000. What’s the current worth of those funds? (Spherical to the closest greenback.)
10. Ajax Corp. is anticipating the next money flows—$79,000, $112,000, $164,000, $84,000, and $242,000—over the subsequent 5 years. If the corporate’s alternative value is 15 %, what’s the current worth of those money flows? (Spherical to the closest greenback.)
11. Jayadev Athreya has began on his first job. He plans to begin saving for retirement early. He’ll make investments $5,000 on the finish of every 12 months for the subsequent 45 years in a fund that may earn a return of 10 %. How a lot will Jayadev have on the finish of 45 years? (Spherical to the closest greenback.)
12. Serox inventory was promoting for $20 two years in the past. The inventory offered for $25 one 12 months in the past, and it’s at the moment promoting for $28. Serox pays a $1.10 dividend per 12 months. What was the speed of return for proudly owning Serox in the newest 12 months? (Spherical to the closest %.)
13. Regatta, Inc., has six-year bonds excellent that pay a eight.25 % coupon charge. Traders shopping for the bond as we speak can anticipate to earn a yield to maturity of 6.875 %. What ought to the corporate’s bonds be priced at as we speak? Assume annual coupon funds. (Spherical to the closest greenback.)
14. Subsequent 12 months Jenkins Merchants pays a dividend of $three.00. It expects to extend its dividend by $zero.25 in every of the next three years. If their required charge of return is 14 %, what’s the current worth of their dividends over the subsequent 4 years?
15. TuleTime Comics is contemplating a brand new present that may generate annual money flows of $100,000 into the infinite future. If the preliminary outlay for such a manufacturing is $1,500,000 and the suitable low cost charge is 6 % for the money flows, then what’s the profitability index for the challenge?
16. What determination standards ought to managers use in choosing tasks when there may be not sufficient capital to put money into all accessible constructive NPV tasks?
• The profitability index.
• The inner charge of return.
• The modified inside charge of return.
• The discounted payback
17. The WACC for a agency is 13.00 %. You realize that the agency’s value of debt capital is 10 % and the price of fairness capital is 20%. What quantity of the agency is financed with debt?
18. If an organization’s weighted common value of capital is lower than the required return on fairness, then the agency:
• Will need to have most popular inventory in its capital construction
• Is financed with greater than 50% debt
• Is perceived to be secure
• Has debt in its capital construction
19. Gangland Water Weapons, Inc., is predicted to pay a dividend of $2.10 one 12 months from as we speak. If the agency’s progress in dividends is predicted to stay at a flat three % endlessly, then what’s the price of fairness capital for Gangland if the worth of its frequent shares is at the moment $17.50?
20. A agency’s capital construction is the combo of economic securities used to finance its actions and might embody the entire following besides
• fairness choices.
• most popular inventory.
21. Dynamo Corp. produces annual money flows of $150 and is predicted to exist endlessly. The corporate is at the moment financed with 75 % fairness and 25 % debt. Your evaluation tells you that the suitable low cost charges are 10 % for the money flows, and seven % for the debt. You at the moment personal 10 % of the inventory.
If Dynamo needs to vary its capital construction from 75 % to 60 % fairness and use the debt proceeds to pay a particular dividend to shareholders, how a lot debt ought to they situation?
22. Turnbull Corp. had an EBIT of $247 million within the final fiscal 12 months. Its depreciation and amortization bills amounted to $84 million. The agency has 135 million shares excellent and a share worth of $12.80. A competing agency that’s similar to Turnbull has an enterprise worth/EBITDA a number of of 5.40.
What’s the enterprise worth of Turnbull Corp.? Spherical to the closest million .
• $1,315 million
• $1,334 million
• $1,787 million
• $453.6 million
23. Jockey Firm has whole property price $four,417,665. At year-end it should have web revenue of $2,771,342 and pay out 60 % as dividends. If the agency desires no exterior financing, what’s the progress charge it might probably assist?
24. Which of the next can’t be engaged in managing the enterprise?
• a sole proprietor
• a common companion
• a restricted companion
• none of those
25. Which of the next does maximizing shareholder wealth not normally account for?
• Authorities regulation.
• The timing of money flows.
• Quantity of Money flows.
26. The strategic plan does NOT establish
• working capital methods.
• the traces of enterprise a agency will compete in.
• main areas of funding in actual property.
• future mergers, alliances, and divestitures.
27. Companies that obtain greater progress charges with out looking for exterior financing
• none of those.
• have a low plowback ratio.
• have much less fairness and/or are capable of generate excessive web revenue resulting in a excessive ROE.
• are extremely leveraged.
28. Drekker, Inc., has revenues of $312,766, prices of $220,222, curiosity cost of $31,477, and a tax charge of 34 %. It paid dividends of $34,125 to shareholders. Discover the agency’s dividend payout ratio and retention ratio.
• 85%, 15%
• 45%, 55%
• 15%, 85%
• 55%, 45%
29. The money conversion cycle
• begins when the agency makes use of its money to buy uncooked supplies and ends when the agency collects money funds on its credit score gross sales.
• estimates how lengthy it takes on common for the agency to gather its excellent accounts receivable steadiness.
• exhibits how lengthy the agency retains its stock earlier than promoting it.
• begins when the agency invests money to buy the uncooked supplies that may be used to provide the products that the agency manufactures.
30. You’re supplied the next working capital info for the Ridge Firm:
Accounts receivable 12,800
Accounts payable 12,670
Web gross sales $124,589
Value of products offered 99,630
Money conversion cycle: What’s the money conversion cycle for Ridge Firm?
• 129.9 days
• 46.four days
• 83.5 days
• 38.three days
FIN/571 Week 6 Last Examination Quiz
FIN571 Week 6 Last Examination
FIN 571 Week 6 Finals
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