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Personal finance- first 20 questions below I have 50 total

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Personal finance- first 20 questions below I have 50 total I need to cross check my answers to a tutors to ensure I am on the right track.
1. What is the primary goal of financial management?
• Increased earning
• Maximizing cash flow
• Maximizing shareholder wealth
• Minimizing risk of the firm
2. One of the major advantages of a sole proprietorship is?
• That there is unlimited liability to the owner
• The simplicity of decision making
• Low organizational cost
• Low operating costs
3. Agency theory examines the relationship between the:
• Shareholders of the form and the firm’s investment banker
• Owners of the firm and the managers of the firm
• Board of directors and large institutional investors
• Shareholders and the firm’s transfer agent
4 .Insider trading occurs when:
• Someone has information not available to the public which they use to profit from trading in stocks
• Corporate officers buy in their company
• Lawyers, investment bankers, and others buy common stock in companies represented by their firms
• Any stock transactions occur in violation of the Federal Trade Commission’s restrictions on monopolies
5. Consider the following information for Ball Corp
• Selling and administrative expensive $50K
• Depreciation expense $80K
• Sales $400K
• Interest expense $30k
• Cost of the goods sold $150k
• Taxes $18,550
• Choices:
What is the Operating Profit for Ball Corp?
o 71,450
o 90,000
o 120,000
o None of theses
6. An item which may be converted to cash within one year or one operation cycle of the firm is classified as a:
• Current liability
• Long term asset
• Current asset
• Long term liability
7. Depreciation is a source of cash inflow because
• It is a tax deductible non cash expense
• It supplies cash for future asset purchases
• It is a tax deductible cash expense
• It is a taxable expense
8. Which two ratios are used in the DuPont system to create return on assets?
• Return on assets and asset turnover
• Profit margin and asset turnover
• Return on total capital and profit margin
• Inventory turnover and return on fixed assets
9. ABC Co. has an average collection period of 60 days. Total credit sales for the year were 3 million. What is the balance in accounts receivable at year end.
• 50k
• 100k
• 500k
• 80k
10. If lease payments are reduced
• Times interest earned goes up
• Fixed charges coverage goes up
• Fixed charge coverage stays the same
• Fixed charge coverage goes down
11. If the company’s account receivable turnover is increasing, the average collection period.
• Is going up slightly
• Is going down
• Could be moving in either direction
• Is going up by a significant amount
12. A rapid rate of growth in sales may require:
• Higher dividend payments to shareholders
• Increased borrowing by the firm to support the sales increase
• The firm to be more lenient with credit customers
• Sales forecasts to be made less frequently
13. A Firm utilizing the FIFO accounting would , in calculating gross profits assume that:
• All sales were from current production
• All sales were from beginning inventory
• Sales were from beginning inventory until it was depleted, and then use sales from current production
• All sales were for cash
14. The different between total receipts and total payments is referred to as:
• Cumulative cash flow
• Beginning cash flow
• Net cash flow
• Cash balance
15. A highly automated plant would generally have
• More variable than fixed costs
• More fixe than variable costs
• All fixed costs
• All variable costs
16. A firm’s break- even point will rise if:
• Fixed cost decrease
• Contribution margins increase
• Price per unit rises
• Variable cost per unit rises
17. Firms with high degree of operating leverage are:
• Easily capable of surviving large changes in sales volume
• Usually trading off lower levels of risk for high profits
• Significantly affected by changes in interest rates
• Trading off high fixed costs for lower per unit variable costs
18. If the business cycle were just beginning its upswing, which firm would you anticipate would be likely to show the best growth in EPS over the next year? Firm A high combined leverage and Firm B has low combined leverage.
• Firm A
• Firm B
• Indifferent between the two
• It depends on how much financial leverage each firm has
19. “Float” takes place because:
• A firm is early paying its bills
• The level of cash of the firm’s books is equal to the level of cash in the bank
• A lag exists between writing a check and clearing it through the banking system
• A customer write “hot” checks
20. Eurodollars:
• Can only be redeemed at U.S. banks or their branches in European countries
• Are U.S. dollars which have been converted into several European Currencies?
• May be borrowed by anyone who wishes to hold dollars
• Can only be redeems at U.S. banks or their branches in any foreign country.
Submitted: 1 year ago.
Category: Homework
Expert:  Linda_us replied 1 year ago.
Hello Jennie,

I woulkd be glad to help you again. Does this post have 20 quetions in all? Please let me know you deadline.
Thanks
Customer: replied 1 year ago.


I have 50 total questions I am cross checking - and I would just need to have these by 5pm tomorrow so I can complete my cross checks - also is there a way to lock the answers after we have completed all of this ? Let me know and I can send over the additional questions.

Expert:  Linda_us replied 1 year ago.
You can post all your questions here or send the document by uploading it on an external website via box.com or mediafire.com.
Once I post the solution before your deadline and you rate it, you can request the customer service to lock it or I can do it myself.
Customer: replied 1 year ago.

21. Modos Company has deposited 2k in checks received from customers. It was written 1,400 in checks to its suppliers. The initial bank and book balance was 400. If 1,600 of its customer’s checks have been cleared but only 600 of its own, calculate the float



  • 200

  • 400

  • 300

  • 700


22. An annuity may be defined as



  • A payment at a fixed interest rate

  • A series of payments of unequal amount

  • A series of yearly payments

  • A series of consecutive payments of equal amounts


23. A home buyer signed a 20- year, 9% mortgage for $72,500. Given the following information, how much should the annual loan payments be?



  • Present value of $1 PVIF = .215

  • Future value of $1 FVIF = 4.661

  • Present value of annuity PVIFA = 9.818

  • Future value of annuity FVIFA = 45.762

    • Choices for the question above are :

    • A. $1,584

    • B. $7,384

    • C. $15,555

    • D. $15,588




24. Jeff believes he will need 60K annual income during retirement. If he can achieve a 5% return during retirement and believes he will live 30 years after retirement, how much does he need to save by the time he retires?



  • $1,029,540

  • $3,986,340

  • $922,320

  • $259,320


25. A bond which has a yield to maturity greater than it’s coupon interest rate will sell for a price:



  • Below par

  • At par

  • Above par

  • What is equal to the face value of the bond plus the value of all interest payments


 



Second half of questions -- Part II


 


1 The return measure that an investor demands for giving up current use of funds, without adjusting for purchasing power changes or the real rate of return, is the:


 


 



  • risk premium.

  • inflation premium.

  • dividend yield.

  • discount rate.


2.The value of a common stock is based on its:



  • past performance.

  • historic dividends.

  • current earnings.

  • value of future benefits to the holder.


 


3.The coupon rate on a debt issue is 12%. If the yield to maturity on the debt is 9.33%, what is the after-tax cost of debt in the weighted average cost of capital if the firm's tax rate is 34%?



  • 3.17%

  • 4.08%

  • 6.16%

  • 7.92%


 


4 A firm is paying an annual dividend of $3.63 for its preferred stock which is selling for $62.70. There is a selling cost of $3.30. What is the after-tax cost of preferred stock if the firm's tax rate is 33%?



  • 2.02%

  • 4.09%

  • 5.79%

  • 6.11%


5 A finn's preferred stock pays an annual dividend of $4, and the stock sells for $80. Flotation costs for new issuances of preferred stock are 5% of the stock value. What is the after-tax cost of preferred stock if the firm's tax rate is 30%?



  • 1.2%

  • 1.58%

  • 3.68%

  • 5.26%


6.For many firms, the cheapest and most important source of equity capital is in the form of:



  • debt.

  • common stock.

  • preferred stock.

  • retained earnings.


 


7 The Dammon Corp. has the following investment opportunities:


 


























































JVIachine A ($15.000)



JVIachine B ($22,500)



 



Machine C ($37,500)



Inflo\vs



In±1ows



 



Inflows



year 1



$6,000



year 1



$12,000



year 1



$-0-



year2



9,000



year 2



12,000



year 2



30,000



year3



3,000



year 3



10,500



year3



30,000



year4



-0-



year4



10,500



year 4



15,000



year 5



-0-



year 5



-0-



year 5



15,000



 


Under the payback method and assuming these machines are mutually exclusive, which machine(s) would Dammon Corp. choose?


 



  • Machine A b.

  • Machine B c.

  • Machine C

  • Machine A and B


 


 


8 The internal rate of return and net present value methods:



  • Always give the same investment decision answer.

  • Never give the same investment decision answer.

  • Usually give the same investment decision answer.

  • Always give answers different from the payback method


9 An asset fitting into the 5-year MACRS category was purchased 2 years ago for $60,000. The book value of this asset is now:



  • 28,800

  • 31,200

  • 48,000

  • 60,000


10 A project has the following projected outcomes in dollars: $250, $350, and$500. The probabilities of their outcomes are 25%, 50%, and 25%respectively. What is the expected value of these outcomes?



  • 362.5

  • 89.4

  • 94.5

  • 178.3


11. A Monte carol simulation model uses:



  • Random variables as inputs

  • A point estimate

  • The cost of capital

  • Portfolio risk


12.A project that carries a normal amount of risk and does not affect the risk exposure of the firm should be discounted back at the



  • Coefficient of variation

  • Beta

  • Risk-free rate

  • Weighted average cost of capital


13.Frisch Fish Corp expects net income next year to be $600K, inventory and accounts receivable will have to be increased by 300k to accommodate this sales level. Frisch will pay dividends of 400K. how much external financial will Frisch Fish need assuming no organically generated increased in liabilities?



  • No external financing is required

  • 100k

  • 200k

  • 300k


14 The term structure of interest rates:



  • Changes daily to reflect current competitive conditions in the money and capital markets

  • Plots returns for securities of different risk

  • Shows the relative interest spread between bonds whit different risk ratings as AAA, AA, A, BBB

  • Depicts interest rates for T-Bills over the last year.


15. Which of the following combinations of asset structures and financing patterns is likely to create the most volatile earnings?



  • Illiquid assets and heavy short-term borrowing

  • Illiquid assets and heavy long-term borrowing

  • Liquid assets and heavy long-term borrowing

  • Liquid assets and heavy short-term borrowing


16. What is generally the largest source of short-terms credit small firms?



  • Bank loans

  • Commercial paper

  • Installment loans

  • Trade credit


17.LIBOR is:


A resource used in production



  • An interest rate paid on Eurodollar loans in the London market

  • An interest rate paid by European firms when they borrow Eurodollar deposits from US Banks

  • The interest rate paid by the British government on its long term bonds


18. Holland Construction Co. has an outstanding 180-day bank loan of


$400,000 at an annual interest rate of 9.5%. The company is required to maintain a 15% compensating balance in its checking account. What is the effective interest rate on the loan? Assume the company would NOT normally maintain this average amount.



  • 11.18%

  • 19.00%

  • 22.35%

  • 8.08%


19. During the next ten years, the major threat to the dominance of the U.S. money and capital markets will come from:



  • Russia's difficulty in transforming its economy into a capitalistic one

  • Japan's prolonged recession and banking crisis

  • The Em·o-zone countries comprising the European Monetary Union and a single currency.

  • The huge Chinese economy and its billion plus people


20. The major supplier of funds for investment in the whole economy is:



  • Businesses

  • Households.

  • Government.

  • Financial institutions


21.The belief in the efficient market hypothesis would lead to the following:



  • Attempting to time the market

  • Increase in index funds

  • Using technical analysis and trends in the market

  • Investing based on the emotional climate


22. The theoretical floor value for a convertible bond is its:



  • Conversion price.

  • Conversion value.

  • Par value.

  • Pure bond value.


23 Vickrey Technology has had net income of $2,000,000 in the current fiscal year. There are 1,000,000 shares of common stock outstanding along with convertible bonds, which have a total face value of $8 million. The $8 million is represented by 8,000 different $1,000 bonds. Each $1,000 bond pays 3 percent interest. The conversion ratio is 30. The firm is in a 30 percent tax bracket. What is Vickrey's diluted earnings per share?



  • 1.75

  • 1.81

  • 2.00

  • None of these listed above


24. Sen Corporation warrants carry the right to buy 10 shares of Sen common stock at $3.50 per share. The common stock has a current market price of 4.25 per share. The intrinsic or minimum value of one Sen warrant is:



  • $.75

  • $7.50

  • $15

  • $0


25. The owner of a call has:



  • The right and the obligation to buy an asset at a given price.

  • The right and the obligation to sell an asset at a given price.

  • The right but not the obligation to buy an asset at a given price.

  • The right but not the obligation to sell an asset at a given price.


 


 


 


 

Expert:  Linda_us replied 1 year ago.
Thanks I got it.
Expert:  Linda_us replied 1 year ago.
THIS ANSWER IS LOCKED!
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Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7049
Experience: Post Graduate Diploma in Management (MBA)
Linda_us and 5 other Homework Specialists are ready to help you
Expert:  Linda_us replied 1 year ago.
Thank you Jennie. I will disable the link to the answers as you requested.
Customer: replied 1 year ago.


Thank you .

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