Linda there are 2 multiple choice and 8 essay question. We have 2 hours to finish the exam. We need to show the work on the essay. Here is the exam:
1. (TCO A) Which of the following does NOT always increase a company's market value? (Points : 5)
Increasing the expected growth rate of sales Increasing the expected operating profitability (NOPAT/Sales) Decreasing the capital requirements (Capital/Sales) Decreasing the weighted average cost of capital Increasing the expected rate of return on invested capital
2. (TCO F) Which of the following statements is correct? (Points : 5)
The NPV, IRR, MIRR, and discounted payback (using a payback requirement of 3 years or less) methods always lead to the same accept/reject decisions for independent projects. For mutually exclusive projects with normal cash flows, the NPV and MIRR methods can never conflict, but their results could conflict with the discounted payback and the regular IRR methods. Multiple IRRs can exist, but not multiple MIRRs. This is one reason some people favor the MIRR over the regular IRR. If a firm uses the discounted payback method with a required payback of 4 years, then it will accept more projects than if it used a regular payback of 4 years. The percentage difference between the MIRR and the IRR is equal to the project’s WACC.
3. (TCO D) The Ramirez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price?
a. $41.58 b. $42.64 c. $43.71 d. $44.80 e. $45.92
4. (TCO G) Singal Inc. is preparing its cash budget. It expects to have sales of $30,000 in January, $35,000 in February, and $35,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expected cash receipts for March?
a. $24,057 b. $26,730 c. $29,700 d. $33,000 e. $36,300
5. (TCO G) Chua Chang & Wu Inc. is planning its operations for next year, and the CEO wants you to forecast the firm's additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year?
Last year's sales = S0
Last year's accounts payable
Sales growth rate = g
Last year's notes payable
Last year's total assets = A0*
Last year's accruals
Last year's profit margin = PM
Target payout ratio
a. -$14,440 b. -$15,200 c. -$16,000 d. -$16,800 e. -$17,640
1. (TCO H) The Dewey Corporation has the following data, in thousands. Assuming a 365-day year, what is the firm's cash conversion cycle?
Annual sales = Annual cost of goods sold = Inventory = Accounts receivable = Accounts payable =
$45,000 $31,500 $4,000 $2,000 $2,400
a. 25 days b. 28 days c. 31 days d. 35 days e. 38 days
2. (TCO C) A firm buys on terms of 2/8, net 45 days, it does not take discounts, and it actually pays after 58 days. What is the effective annual percentage cost of its nonfree trade credit? (Use a 365-day year.)
a. 14.34% b. 15.10% c. 15.89% d. 16.69% e. 17.52%
3. (TCO E) Sapp Trucking's balance sheet shows a total of noncallable $45 million long-term debt with a coupon rate of 7.00% and a yield to maturity of 6.00%. This debt currently has a market value of $50 million. The balance sheet also shows that the company has 10 million shares of common stock, and the book value of the common equity (common stock plus retained earnings) is $65 million. The current stock price is $22.50 per share; stockholders' required return, rs, is 14.00%; and the firm's tax rate is 40%. The CFO thinks the WACC should be based on market value weights, but the president thinks book weights are more appropriate. What is the difference between these two WACCs?
a. 1.55% b. 1.72% c. 1.91% d. 2.13% e. 2.36%
4. (TCO B) Leak Inc. forecasts the free cash flows (in millions) shown below. If the weighted average cost of capital is 11% and FCF is expected to grow at a rate of 5% after Year 2, what is the Year 0 value of operations, in millions? Assume that the ROIC is expected to remain constant in Year 2 and beyond (and do not make any half-year adjustments). Year: 1 2 Free cash flow: -$50 $100
a. $1,456 b. $1,529 c. $1,606 d. $1,686 e. $1,770
5. (TCO G) Based on the corporate valuation model, Hunsader's value of operations is $300 million. The balance sheet shows $20 million of short-term investments that are unrelated to operations, $50 million of accounts payable, $90 million of notes payable, $30 million of long-term debt, $40 million of preferred stock, and $100 million of common equity. The company has 10 million shares of stock outstanding. What is the best estimate of the stock's price per share?
a. $13.72 b. $14.44 c. $15.20 d. $16.00 e. $16.80
Thank you Linda. Good night.
This is Paul. Hope you doing well. I need help with ECON 545. I need help with this quiz. Can You be able to help me?
Quiz 1 GM 545
1. (TCO A) There is an increase in the cost of materials for producing bicycles. What happens to bicycle supply? What happens to bicycle demand?
2. (TCO A) Digital cameras and memory cards are complements in consumption. The price of digital cameras falls. What happens to the demand for memory cards? What happens for the demand for digital cameras?
3. (TCO A) The number of corn producers increases. What happens to the supply of corn? What happens to the demand of corn?
4. (TCO A) A market is in equilibrium quantity Q” and equilibrium price P”. What happen to P’ if there is an increase in supply? What happens to Q” if there is a decrease in supply and a decrease in demand? What happens to P” if there is an increase in demand followed by a decrease in supply followed by another increase in demand?
5. (TCO B) The following table shows part of the demand for tickets to a local sporting event:
Price (P) Quality (Q)
Is the demand elastic in the $3 - $6 price range? In the $6 - $10 price range. In this range of demand, by what percentage would quantity demanded change if price change by 5 percent? Price falls from $15 to $10. Does total revenue (TR) increase, decrease, or remain the same?
6. (TCO B) For a given labor supply, would the potential unemployment impact of an increase in the minimum wage be greater in the case of the elastic or inelastic demand for labor? Explain why, using hypothetical numbers to illustrate your case.
7. (TCO C) You have been hired to manage a small manufacturing facility whose cost and production data are given in the table below.
No. of workers Total Labor Cost Output Total Revenue
1 $150 100 $170
2 $300 108 $550
3 $450 114 1150
4 $600 119 1470
5 $750 123 1600
6 $900 125 1700
7 1050 126 1750
What is the marginal product of the second worker? What is the marginal revenue product of the fourth worker? What is the marginal cost of the fifth worker? Based on your knowledge of marginal analysis, how many workers should you hire? Explain your answer.
8. (TCO C) Answer the next question on the basis of the following cost data for a purely competitive seller:
Total Product TFC TVC
0 $50 $0
1 $50 70
2 $50 120
3 $50 150
4 $50 220
5 $50 300
6 $50 390
Refer to the above data. If the product price is $85 at its output, will the film realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations.
9. (TCO C) Answer the next question on the basis of the following cost data for a purely competitive seller:
Refer to the above data. If the product price is $105 at its output, will the film realize an economic profit, break even, or incur an economic loss? How much will the profit or loss be? Show all calculations.
10. (TCO C) A firm has Total Cost (TC) of $12,000 over the next three months (TOTAL for the 3 months – not per month), of which $8,000 are fixed cost (TFC) for the rent on its lease that cannot be broken. If it stays in business over those months, then the firm will collect only $6,000 in revenue (TR). So, considering only this information, should they stay in business for those three months or should they close down right now? Provide your reasoning.
Thank for your responding. So are you going to be able to help me with this quiz on ECON 545 (GM545). I had not started yet or open the quiz. I have approximately 1.5 hrs to finish this quiz. The one that I sent you is just an example... Please advise. I need to do well.
This is Paul, I still you help... Let me know if you are available .
No,there 10 short essay answer question similar to the one I priviuosly sent you.
Ok, thanks I will do that. Hopefully I will get someone as good as you are. Have a great day!
I know Linda, I just like the work you do and I wanted to try to see if you could do the job. Maybe next time. I really appreciate your time. Let keep in touch.