The first step in cash budget preparation is the (Points : 3)estimation of credit sales estimation of the expected cash disbursements scheduling of disbursements determination of estimated receipts
07 Sep 2020Which of these ratios indicate the firmâs ability to use its assets to an increase in sales: (Points : 3)Profitability ratios market value ratios Liquidity ratios Financial leverage management ratios None of the above
07 Sep 2020For a profit making company, other things being constant, increased use of debt generally means decreased ROE. (Points : 3)True False
07 Sep 2020The earnings of Omega Supply Company have grown from $2.00 per share to $5.16 per share over a nine year time period. Determine the compound annual growth rate. (Points : 3)11.1% 8% 22.2% 100%
07 Sep 2020ROI cannot be referred to as: (Points : 3)ROE Return on assets ROA all of the above
07 Sep 2020The net asset value (NAV) of a mutual fund refers to:A.The amount of "load" carried by the fundB.The asset difference between the index portion and the managed portion of the fundC.The funds price per shareD.How much of the fund is "closed end."E.None of the above
07 Sep 2020You are the executive officers of Big Buns, Inc. (BBI). BBI manufactures different types of chairs and accessories. You have had several good years and have decided to expand. BBI is looking at acquiring another company as a subsidiary. As executives (financially savvy and adept ...
07 Sep 2020My son plans to go to college and plans to pay most of his first years expenses himself. In exactly five years from today, he wants to have $17,000 accumulated. If he plans to pay equal annual dollar amounts into an account that pays 5% per year, how much should each of his five ...
07 Sep 2020Savings and loan are also referred to asA.Building and people societiesB.Building and loan societiesC.Savings banksD.Commercial banksE.None of the above
07 Sep 2020The early savings and loans were managed and directed byA.The governmentB.DepositorsC.The bank directorsD.All of the aboveE.None of the above
07 Sep 2020Estimate American Airlines approximate WACC; use the most recent yearâs debt ratio to find the weights of debt and equity. If your company issues preferred stock, for simplicityâs sake, ignore it. The cost of debt will be the approximate YTM. Use CAPM to calculate your compan...
07 Sep 2020Most of the revenues generated by savings associations are from ____, while most of the expenses are from ____.A.Loan interest and fees, interest paid on depositsB.Nonmortgage loan interest, interest paid on long-term bondsC.Interest paid on deposits, interest paid on long-term b...
07 Sep 2020Overnight Publishing Company (OPC) has $3.3 million in excess cash. The firm plans to use this cash either to retire all of its outstanding debt or to repurchase equity. The firmâs debt is held by one institution that is willing to sell it back to OPC for $3.3 million. The inst...
07 Sep 20201- Uncle Tim gave me $130 today for my birthday. He also promised to give me another $130 each for my next two birthdays. If I deposit all the money I receive from my uncle Tim on the day it is given to me at 6% how much will I have at the end of three years? (Points : 3)$438.70 ...
07 Sep 2020Generally, which of the following is true? (where rE is the cost of equity, rD is the cost of debt and rA s the cost of capital for the firm.A.rD> rA> rEB.rE> rD> rAC.rE> rA> rDD.None of the above is true
07 Sep 2020Which one of the following has to occur if the NPV of an independent project is positive?The AAR will equal the IRR.The IRR will be less than the required return.The payback period will exceed the life of the project.The PI will be greater than 1.0.
07 Sep 2020You need to accumulate $10,000. To do so, you plan to make deposits of $1,600 per year - with the first payment being made a year from today - into a bank account that pays 6.51% annual interest. Your last deposit will be less than $1,600 if less is needed to round out to $10,000...
07 Sep 20201. Giggle Inc reports the following abbreviated balance sheet: Cash = $8000 Other Asset = $20000 Debt = $0 Equity = $28000 Number of shares outstanding = 3000 Giggle just paid a cash dividend of $1.50 per share. What is the new share price after the dividend payment? $ ...
07 Sep 2020Assume that X corp needs 100,000 New Zealand dollars 180 days from now. If the probability distribution isPossible Value of New Zealand Dollars in 180 daysProbability$0.405%$0.4510%$0.4830%$0.5030%$0.5320%$0.555%The 180-day forward rate of the New Zealand dollar is $0.52. The spo...
07 Sep 2020Your supplier offers term of 1.2/6, Net 45. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 45. The effective annual cost of the trade credit is %?
07 Sep 2020Assume the credit terms offered to your firm by your suppliers are 2.9/4, Net 30. Calculate the cost of the trade credit if your firm does not take the discount and pays on day 30. The effective annual cost of the trade credit is %?
07 Sep 2020What is the Macaulay duration of a five year 1000 par value bond with 6% annual coupons and an effective rate of interest equal to 7%? What is its modified duration.
07 Sep 2020A 12-year, 5% coupon bond pays interest annually. The bond has a face value of $1,000. What is the change in the price of this bond if the market yield rises to 7% from the current yield of 4.5%? (Price change means a percentage change)
07 Sep 2020Your company bonds have a par value of $1,000, a current price of $1,234, and they will mature in 20 years. What is the yield to maturity on these bonds if the bonds have 7.25% coupon rate and pay semi-annually?
07 Sep 2020JadaTech purchased a used Crane for $50,000. The operating cost was $5,000 per month, with average revenues of $7500 per month. After two years the crane was sold for $11,000. What was the rate of return on this investment?Solve by using trial and error method.
07 Sep 2020You have $20,000 to invest. You want to purchase shares of Alaska Air at $43.56, Best Buy at $52.42, and Ford Motor at $9.06. How many shares of each company should you purchase so that your portfolio consists of 40 percent Alaska Air, 20 percent Best Buy, and 40 percent Ford Mot...
07 Sep 2020A lump sum payment of $1,000 is due at the end of 5 years. The nominal interest rate is 10%, semiannual compounding. Which of the following statements is CORRECT? The present value of the $1,000 would be greater if interest were compounded monthly rather than semiannually. The PV...
07 Sep 2020Santos Unlimited (SU) was originally unlevered with 4300 shares outstanding. However, after a major financial restructure, SU now has $39000 of debt, with an annual interest expense of 11 percent. The restructuring has reduced the number of shares to 3500. A group of shareholders...
07 Sep 2020Oak Farms is an unlevered firm with 2050 shares outstanding and an EBIT of 650. Corporate earnings are taxed at a rate of 35 Calculate EPS for Oak Farms. $________Note: Your answer should be in dollars and cents. For example, $0.99. Suppose that Oak Farms makes a decision t...
07 Sep 2020a.)If you were a major shareholder of a publicly traded firm, would you prefer that stock options be traded on the companyâs stock? Why or why not? Use the internet to research this issue.b.)Describe what you found and provide cites to relevant articles or blog posts.
07 Sep 2020Which of the following action will decrease a bonds yield to maturity? Investors learn that these bonds are subordinated to another debt issue. The economy seems to shifting from a boom to a recession. A change in the bankruptcy code makes it more difficult for bondholders to rec...
07 Sep 2020One of your customers is delinquent on his accounts payable balance. Youâve mutually agreed to a repayment schedule of $500 per month. You will charge 1.35 percent per month interest on the overdue balance. If the current balance is $12,500, how long will it take for the accoun...
07 Sep 2020Dave loans Mary $50,000, payable on demand. Mary invests the money in a 5% Certificate of Deposit. The short term imputed interest rate is 2%. What amount of imputed interest income is Dave required to recognize?
07 Sep 2020With interest at 9% compounded annually, what is the fewest number of years (integer-valued) required for money to double in magnitude?
07 Sep 2020For multinational companies, how do they treat exchange rates when they look at their balance sheets at year and and their income statements for the year?
07 Sep 2020You have accumulated some money for your retirement. You are going to withdraw $77,256 every year at the beginning of the year for the next 15 years. How much money have you accumulated for your retirement? Your account pays you 16.30 percent per year, compounded annually. To ans...
07 Sep 2020A share of stock with a beta of .68 now sells for $43. Investors expect the stock to pay a year-end dividend of $2. The T-bill rate is 3%, and the market risk premium is 6%. If the stock is perceived to be fairly priced today, what must be investorsâ expectation of the price of...
07 Sep 2020On 15 August 1996 the U.S. Treasury issued a bond maturing on 15 August 2026. The bond has a coupon rate of 6%, payable semiannually on 15 February and 15 August of every year. If a $100 face value bond is selling for $117.25 on 15 August 2015, what is the bondâs yield to matur...
07 Sep 2020Woodpecker, Inc., stock has an annual return mean and standard deviation of 12.4 percent and 43 percent, respectively. What is the smallest expected loss in the coming month with a probability of 2.5 percent? (Negative value should be indicated by a minus sign. Do not round inter...
07 Sep 2020Problem 14-9 Alternative dividend policiesIn 2013 the Keenan Company paid dividends totaling $2,940,000 on net income of $12.5 million. Note that 2013 was a normal year and for the past 10 years, earnings have grown at a constant rate of 5%. However, in 2014, earnings are expect...
07 Sep 2020You are constructing a portfolio of two assets, Asset A and Asset B. The expected returns of the assets are 11 percent and 14 percent, respectively. The standard deviations of the assets are 35 percent and 43 percent, respectively. The correlation between the two assets is .53 an...
07 Sep 2020Government bonds are considered to be risk-free assets. Why, then, do they give a return? Are they truly completely free of risk?
07 Sep 2020What is the impact on Financial Managers on indian econmy?
07 Sep 2020You are thinking of buying a miniature golf course. It is expected to generate cash flows of $50,000 per year in years 1 through 4 and $60,000 per year in years 5 through 8. If the appropriate discount rate is 9%, what is the present value of these cash flows? Show Work.
07 Sep 2020Bond Valuation Clifford Clark is a recent retiree who is interested in investing some of his savings in corporate bonds. His financial planner has suggested the following bonds:o Bond A has a 7% annual coupon, matures in 12 years, and has a $1,000 face value.o Bond B has a 9% ann...
07 Sep 2020An increase in which one of the following will increase net income? A. Fixed costs B. Depreciation C. Marginal tax rate D. Revenue E. Dividends 21. Which two of the following determine when revenue is recorded on the financial statements based on the recognition principle? I. Pay...
07 Sep 2020The Play Houses December 31, 2013, balance sheet showed net fixed assets of $1,238,000 and the December 31, 2014, balance sheet showed net fixed assets of $1,416,000. The companys 2014 income statement showed a depreciation expense of $214,600. What was the firms net capital spen...
06 Sep 2020Red Beach Marine Engines Ltd must develop the relevant cash flows for a replacement capital investment proposal. The proposed asset costs $50,000 and has installation costs of $3,000. The asset will be depreciated using the prime cost (straight-line) method over a five-year life....
06 Sep 2020You deposit $8,000 today in a bank that promises to pay an annual interest of 10%? What is future value of this sum at the end of 8 years?
06 Sep 2020Q15. A project requires an initial investment of $20,000 and has a net present value of $4,000. The profitability index of this project is: A. 0.20. B. 0.80. C. 1.20. D. 1.25. E. 5.00.
06 Sep 2020
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