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Scott, MIT Graduate
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1. (TCO 1) Which of the following statements is not true regarding

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1. (TCO 1) Which of the following statements is not true regarding the goal of financial management? (Points: 3)
The goal of maximizing the value per share of existing stock is relevant to all organizations.
A way of aligning management goals to shareholder's interest is to tie managerial compensation to the market value of the firm's stock.
For a company considering international operations, the goal will be the same but the company will have to consider the local social, economical and political environment in the decision-making process.
All of the above are true.


2. (TCO 1) Market value is important to the financial manager because: (Points: 3)
It reflects the value of the asset based on generally-accepted accounting principles.
Is a crucial component of the balance sheet and can impact the financial statements.
Market values reflect the amount someone is willing to pay today for an asset.
The market value of an asset reflects its historical cost.


3. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold...............................$1.2 million
Administrative expenses........................$250,000
Marketing and selling expenses...............$175,000
Depreciation........................................$500,000
Interest expense..................................$200,000
Dividends paid.....................................$150,000
(TCO 1) Suppose that Sports Baseball has 20,000 shares of stock. What is the dividends per share figure?

(Points: 3)
5.0
8.75
7.50
5.50


4. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold...............................$1.2 million
Administrative expenses........................$250,000
Marketing and selling expenses...............$175,000
Depreciation........................................$500,000
Interest expense..................................$200,000
Dividends paid.....................................$150,000
(TCO 1) Assuming a tax rate of 30%, what is the EBIT and taxable income for the year?

(Points: 3)
$1,000,000 and $800,000 respectively
$575,000 and $375,000 respectively
$565,000 and $365,000 respectively
$425,000 and $225,000 respectively
None of the above


5. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold...............................$1.2 million
Administrative expenses........................$250,000
Marketing and selling expenses...............$175,000
Depreciation........................................$500,000
Interest expense..................................$200,000
Dividends paid.....................................$150,000
(TCO 1) Select all items that will be included in Sports Baseballs, Inc. Income Statement. For this exercise you will be choosing more than one option for your answer:

(Points: 3)
Accounts receivable
Cost of goods sold
Net working capital
Interest expense
Taxes
Current assets
Short-term loans
Cash on hand
Inventory


6. (TCO 1) Which one of the following activities best exemplify capital structure decisions. For this exercise you will be choosing more than one option for your answer: (Points: 6)
Determine the most adequate mixture of debt and equity to be maintained.
Obtain a short-term loan to purchase materials.
Identify two capital investment projects.
Determine the cost of each source of capital.
Determine the return of a potential project.
Calculate the cash flows for a project.
Assess the terms of loans and evaluate potential long-term financing options.


7. (TCO 1) Match the following terms with the examples as appropriate: (Points: 4)
Matching:
AnswerPotential Matches:
: Managerial compensation 1: McDonald's work to redesign packaging items with recyclable materials.
2: Protection against financial malpractices and accounting fraud.
3: incentive to encourage managers to increase share value.
4: the decision of a manager

8. (TCO 1) Can you provide some examples of recent well-known unethical behavior cases? Explain the situation in one or two sentences. (Points: 5)
Submitted: 6 years ago.
Category: Homework