学士班2A财务管理

1. A business organization owned by two or more individuals or entities, each of whom has unlimited liability for the firms debts, is called a:A.limited liability company.B.limited partnership.C.dual company.D.joint stock company.E.general partnership.2. The potential conflict of interest between a firms owners and its managers is referred to as a(n):A.organizational problem.B.structure problem.C.agency problem.D.control issue.E.management conflict.3. The daily financial operations of a firm are primarily controlled by managing the:A.total debt level.B.working capital.C.capital structure.D.capital budget.E.long-term liabilities.4. The Du Pont identity helps financial managers determine: I. why a firms return on equity is lower than anticipated.II. the operating efficiency of a firm.III. the utilization rate of a firms assets.IV. the rate of return on a firms assets.A.II and III onlyB.I and III onlyC.II, III, and IV onlyD.I, II, and III onlyE.I, II, III, and IV5. Which of the following will increase the sustainable rate of growth for a firm? I. decreasing the profit marginII. increasing the dividend payout ratioIII. decreasing the capital intensity ratioIV. increasing the target debt-equity ratioA.I and II onlyB.III and IV onlyC.II and IV onlyD.I, III, and IV onlyE.I, II, III, and IV6. Which one of the following ratios indicates how long a firm can pay its bills given its current cash balance?A.current ratioB.debt ratioC.cash coverage ratioD.quick ratioE.cash ratio7. A firm has a current ratio of 1.2 and a quick ratio of 0.5. This indicates that:A.the firm buys inventory on credit.B.inventory represents more than 50 percent of the firms current assets.C.cash is the largest component of current assets.D.the firm has more current liabilities than it does current assets.E.current assets represent more than 50 percent of total assets.8. Bluff, Inc. incurred depreciation expenses of $48,500 last year. The sales were $358,900 and the addition to retained earnings was $39,400. The firm paid interest of $14,300 and dividends of $10,000. The tax rate was 35 percent. What was the amount of the costs incurred by the firm for last year?A.$215,100B.$220,100C.$245,800D.$248,700E.$286,1009. Which one of the following will increase the net working capital of a firm?A.obtaining a 3-year loan to purchase inventoryB.collecting payment from a customerC.obtaining a 5-year loan to buy equipmentD.paying a supplier for a recent purchaseE.making a payment on a long-term debt10. Douglass, Inc. has sales of $132,000, costs of $103,000, depreciation expense of $11,000, and interest paid of $4,100. The tax rate is 34 percent. How much net income did Douglass, Inc. earn for the period?A.$5,434B.$9,174C.$11,800D.$16,434E.$18,00011. Donovan, Inc. owes a total of $17,129 in taxes for this year. The taxable income is $68,556. If Donovan earns $100 more in income, it will owe an additional $35 in taxes. What is Donovans average tax rate on income of $68,656?A.15 percentB.21 percentC.25 percentD.34 percentE.35 percent12. Free cash flow is equal to:A.net income plus depreciation.B.cash flow from assets.C.earnings before interest and taxes plus depreciation minus taxes.D.cash flow to shareholders.E.the addition to retained earnings.13. Which of the following will increase the profit margin of a firm, all else constant? I. increasing depreciationII. decreasing cost of goods soldIII. decreasing the tax rateIV. increasing interest expenseA.I and III onlyB.II and IV onlyC.II and III onlyD.I, II, and III onlyE.I, II, III, and IV14. Net working capital is defined as:A.cash, accounts receivable, and inventory.B.current assets.C.cash minus current liabilities.D.current assets plus current liabilities.E.current assets minus current liabilities.15. Smith Motors reports the following account balances: inventory of $33,100, equipment of $84,400, accounts payable of $16,900, cash of $5,000, and accounts receivable of $22,600. How much does the firm have in net working capital?A.$38,800B.$43,800C.$55,700D.$67,500E.$72,60016. Cash flow to stockholders is defined as:A.cash flow from assets plus cash flow to creditors.B.operating cash flow minus cash flow to creditors.C.dividends paid plus the change in retained earnings.D.dividends paid minus net new equity raised.E.net income minus the addition to retained earnings.17. Financial leverage: I. decreases the potential returns to shareholders.II. increases the potential returns to shareholders.III. decreases the likelihood the firm will face financial distress.IV. increases the likelihood the firm will face financial distress.A.I onlyB.IV onlyC.I and III onlyD.I and IV onlyE.II and IV only18. Which one of the following is classified as a current asset?A.landB.accounts payableC.equipmentD.inventoryE.note payable19. The Cable Co. has a profit margin of 3 percent and a dividend payout ratio of 10 percent. What is the plowback ratio?A.7 percentB.13 percentC.27 percentD.30 percentE.90 percent20. Mining Materials, Inc. has a market-to-book ratio of 1.6, net income of $180,000, a book value per share of $52.50, and 120,000 shares of stock outstanding. What is the price-earnings ratio?A.29B.34C.47D.56E.6421. A firm has a days sales in inventory value of 46. This means the firm:A.has sufficient inventory to support its sales for 46 weeks.B.has sufficient inventory to support its sales for 46 days.C.pays its suppliers in 46 days.D.grants its customers 46 days to pay for their purchases.E.sells its inventory an average of 46 times each year.22. Which one of the following is a correct method of computing the Du Pont identity?A.(Return on assets) (Total asset turnover)B.(Return on equity) (Equity multiplier)C.(Profit margin) (Capital intensity ratio) (Equity multiplier)D.(Profit margin) (1 / Capital intensity ratio) (1 + Debt-equity ratio)E.(Equity multiplier) (Profit margin) (Return on assets)23. Premium Pet Supplies has sales of $98,400. The costs of goods sold are $55,000 and the other costs are $21,000. Depreciation is $12,000 and the tax rate is 35 percent. What is the net income of the company?A.$2,560B.$3,640C.$6,760D.$10,400E.$14,56024. The capital structure of a firm refers to the firms:A.buildings and equipment.B.combination of assets.C.available cash.D.long-term debt and equity.E.current assets and liabilities.25. An agency problem is prone to exist in public corporations because:A.of the size of the operations.B.operations are frequently spread over various geographic locations.C.management is frequently separated from ownership.D.managers tend to be long-term employees.E.some owners are also company employees.26. The process of managing a firms long-term investments is called:A.capital structure management.B.asset allocation.C.risk management.D.capital budgeting.E.working capital management.27. The Mailbox Co. invested $50,000 at 7.5 percent compounded annually for 2 years. How much compound interest did the company earn over this period of time?A.$281.25B.$3,750.00C.$4,614.83D.$7,500.00E.$7,781.2528. Twenty years ago, you deposited $1,000 into an account. Fifteen years ago, you added an additional $3,000 to your account. You earned 6 percent, compounded annually, for the first 5 years and 10 percent, compounded annually, for the last 15 years. How much money do you have in your account today?A.$4,925.34B.$5,634.48C.$13,880.59D.$18,121.84E.$19,369.4329. Dr. McDougall just deposited $8,000 into his account at The Elite Bank. The bank will pay 5 percent interest compounded annually on this money. How much interest on interest will Dr. McDougall earn over the next 15 years?A.$2,400.00B.$2,631.43C.$8,631.43D.$10,400.00E.$10,631.4330. You want to invest an amount of money today and receive back twice that amount in the future. You expect to earn 6 percent interest. Approximately how long must you wait for your investment to double in value?A.6 yearsB.8 yearsC.9 yearsD.10 yearsE.12 years31. You need $20,000 in cash to buy a car 5 years from today. You expect to earn 6.5 percent, compounded annually, on your savings. How much do you need to deposit today if this is the only money you save for this purpose?A.$12,468.07B.$12,502.14C.$14,597.62D.$17,044.32E.$17,129.0132. CNP, Inc. is considering a project that will produce cash inflows of $12,000 in year one, $27,600 in year two, and $48,100 in year three. What is the present value of these cash inflows if the company assigns the project a discount rate of 10.5 percent?A.$58,372.13B.$64,999.91C.$69,113.58D.$71,824.90E.$76,370.5133. Around Town Movers recently purchased a new truck costing $97,000. The firm financed this purchase at 8.25 percent interest with monthly payments of $2,379.45. How many years will it take the firm to pay off this debt?A.3.0 yearsB.3.5 yearsC.4.0 yearsD.4.5 yearsE.5.0 years34. The difference between an ordinary annuity and an annuity due is the:A.number of annuity payments.B.amount of each annuity payment.C.frequency of the annuity payments.D.interest rate applied to the annuity payments.E.timing of the annuity payments.35. Today, you are purchasing a 15-year, 8 percent annuity at a cost of $70,000. The annuity will pay annual payments. What is the amount of each payment?A.$4,919.41B.$5,485.35C.$6,329.57D.$7,128.73E.$8,178.0736. Top Quality Investments will pay you $2,000 a year for 25 years in exchange for $19,000 today. What interest rate are you earning on this annuity?A.9.42 percentB.10.51 percentC.11.30 percentD.12.63 percentE.13.89 percent37. Warrens Diner needed a new location. This establishment spent $65,000 to refurbish an old shop and create the current facility. The firm borrowed 75 percent of the refurbishment cost at 8 percent interest for 11 years. What is the amount of each monthly payment?A.$91.05B.$284.13C.$556.50D.$682.87E.$731.6038. Sky Investments offers an annuity due with semi-annual payments for 10 years at 7 percent interest. The annuity costs $90,000 today. What is the amount of each annuity payment?A.$6,118.35B.$6,332.50C.$7,210.64D.$7,939.59E.$8,495.3639. Your brother will receive $450 a month for the next six years from an insurance settlement. The interest rate is 5 percent, compounded monthly, for the first two years and 6.5 percent, compounded monthly, for the final four years. What is this settlement worth to your brother today?A.$17,173.19B.$18,975.37C.$21,537.72D.$24,364.82E.$27,430.4540. Dustin is considering an investment that will pay $3,000 a year for 10 years, starting 1 year from today. How much should Dustin pay for this investment if he wishes to earn a 9 percent rate of return?A.$17,985.74B.$18,349.81C.$19,252.97D.$20,415.57E.$21,213.24