FIN 370 Final Exam Guide (New)

To Purchase This Material Click below Link

http://www.fin370homework.com/product-37-FIN-370-
Final-Exam-Guide-(New)
FOR MORE CLASSES VISIT
www.fin370homework.com
Which financial statement reports the amounts of cash that the firm
generated and distributed during a particular time period? statement of
retained earnings Income statement Statement of cash flows Balance
sheet Which of these provide a forum in which demanders of funds
raise funds by issuing new financial instruments, such as stocks and
bonds? Money markets Investment banks Primary markets Secondary
markets The top part of Mars, Inc.s 2013 balance sheet is listed as
follows (in millions of dollars). What are Mars, Inc.s current ratio,
quick ratio, and cash ratio for 2013? 4.2, 1.0, 0.2 2.3333, 0.5556,
0.1111 10.5, 6.0, 1.0 0.1111, 0.5556, 0.2 Which of these ratios show
the combined effects of liquidity, asset management, and debt
management on the overall operation results of the firm? Financial
Profitability Coverage Liquidity As new capital budgeting projects
arise, we must estimate__________. the cost of the stock being sold
for the specific project when such projects will require cash flows the
cost of the loan for the specific project the float costs for financing the
project Whats the current yield of a 6 percent coupon corporate bond
quoted at a price of 101.70? 6.1 percent 10.2 percent 6.0 percent 5.9
percent We call the process of earning interest on both the original
deposit and on the earlier interest payments: computing. multiplying.
compounding. discounting. Which financial statement reports a firms
assets, liabilities, and equity at a particular point in time? Balance
sheet Income statement Statement of retained earnings Statement of
cash flows You are trying to pick the least-expensive machine for
your company. You have two choices: machine A, which will cost
$50,000 to purchase and which will have OCF of -$3,500 annually
throughout the machines expected life of three years; and machine B,
which will cost $75,000 to purchase and which will have OCF of -
$4,900 annually throughout that machines four-year life. Both
machines will be worthless at the end of their life. If you intend to
replace whichever type of machine you choose with the same thing
when its life runs out, again and again out into the foreseeable future,
and if your business has a cost of capital of 14 percent, which one
should you choose? Machine A Machine B Neither machine A nor B
Both machines A and B When firms use multiple sources of capital,
they need to calculate the appropriate discount rate for valuing their
firms cash flows as__________. a simple average of the capital
components costs a weighted average of the capital components costs
a sum of the capital components costs they apply to each asset as they
are purchased with their respective forms of debt or equity Which of
these is used as a measure of the total amount of available cash flow
from a project? Operating cash flow Investment in operating capital
Free cash flow Sunk cash flow Which of these does NOT perform
vital functions to securities markets of all sorts by channeling funds
from those with surplus funds to those with shortages of funds?
Secondary markets Mutual funds Insurance companies Commercial
banks Wills Wheels, Inc. reported a debt-to-equity ratio of 0.65 times
at the end of 2013. If the firms total debt at year-end was $5 million,
how much equity does Wills Wheels have? $7.69 million $5 million
$0.65 million $3.25 million Which of these is the term for portfolios
with the highest return possible for each risk level? Total portfolios
Modern portfolios Optimal portfolios Efficient portfolios What are the
tools available for the manager in financial planning? Delaying
disbursement of cash, reducing collection period, cash management,
and Increasing inventory turnover Reducing collection period and
delaying disbursement of cash Increasing inventory turnover and
reducing collection period Delaying disbursement of cash and cash
management Suppose that Model Nails, Inc.s capital structure
features 60 percent equity, 40 percent debt, and that its before-tax cost
of debt is 6 percent, while its cost of equity is 10 percent. If the
appropriate weighted average tax rate is 28 percent, what will be
Model Nails WACC? 7.73 percent 8.40 percent 8.00 percent 16.00
percent We commonly measure the risk-return relationship using
which of the following? Coefficient of variation Standard deviation
Expected returns Correlation coefficient Financial plans include
which of the following? Schedule of Sales, Expenses, and Capital
Expenditure All of the above Short Term and Long Term Plan Pro
forma Income Statement, Balance Sheet Which of the following terms
means that during periods when interest rates change substantially,
bondholders experience distinct gains and losses in their bond
investments? Interest rate risk Credit quality risk Reinvestment rate
risk Liquidity rate risk What are reasons for the firm to go abroad?
Access to raw materials Diversification Lower production cost All of
the above Which of these statements is true regarding divisional
WACC? Using a simple firmwide WACC to evaluate new projects
would give an unfair advantage to projects that present more risk than
the firms average beta. Using a divisional WACC versus a WACC for
the firms current operations will result in quite a few incorrect
decisions. Using a firmwide WACC to evaluate new projects would
have no impact on projects that present less risk than the firms
average beta. Using a simple firmwide WACC to evaluate new
projects would give an unfair advantage to projects that present less
risk than the firms average beta. The Rule of 72 is a simple
mathematical approximation for__________. the number of years
required to double an investment the payments required to double an
investment the present value required to double an investment the
number of years required to double an investment the future value
required to double an investment We can estimate a stocks value
by__________. using the book value of the total stockholder equity
section using the book value of the total assets divided by the number
of shares outstanding discounting the future dividends and future
stock price appreciation compounding the past dividends and past
stock price appreciation Which of these is the process of estimating
expected future cash flows of a project using only the relevant parts of
the balance sheet and income statements? Substitutionary analysis
Incremental cash flows Cash flow analysis Pro forma analysis Five
years ago, Jane invested $5,000 and locked in an 8 percent annual
interest rate for 25 years (ending 20 years from now). James can make
a 20-year investment today and lock in a 10 percent interest rate. How
much money should he invest now in order to have the same amount
of money in 20 years as Jane? $7,346.64 $5,089.91 $3,160.43
$3,464.11 The overall goal of the financial manager is to__________.
maximize net income maximize earnings per share maximize
shareholder wealth minimize total costs Which of the following can
create ethical dilemmas between corporate managers and
stockholders? Auditors Board of directors Agency relationship
Venture Capitalist A firm is expected to pay a dividend of $2.00 next
year and $2.14 the following year. Financial analysts believe the stock
will be at their target price of $75.00 in two years. Compute the value
of this stock with a required return of 10 percent. $79.14 $65.40
$65.57 $66.67 Which financial statement shows the total revenues
that a firm earns and the total expenses the firm incurs to generate
those revenues over a specific period of time generally one year?
Statement of cash flows Statement of retained earnings Balance sheet
Income statement Which of the following is a true statement? If
interest rates fall, all bonds will enjoy rising values. If interest rates
fall, corporate bonds will have decreasing values. If interest rates fall,
no bonds will enjoy rising values. If interest rates fall, U.S. Treasury
bonds will have decreasing values.