STR 581 Capstone Final Examination, Part Two
1. Internal reports that review the actual impact of decisions
are prepared by:
- the
controller
- department
heads
- factory
workers
- management
accountants
2. Horizontal analysis is also known as:
- trend
analysis
- vertical
analysis
- linear
analysis
- common
size analysis
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Examination, Part Two
3. Which of the following is an advantage of corporations
relative to partnerships and sole proprietorships?
- most
common form of organization
- reduced
legal liability for investors
- lower
taxes
- harder to
transfer ownership
4. Serox stock was selling for $20 two years ago. The stock sold
for $25 one year ago, and it is currently selling for $28. Serox pays a
$1.10 dividend per year. What was the rate of return for owning Serox in
the most recent year? (Round to the nearest percent.)
- 32%
- 16%
- 12%
- 40%
5. External financing needed: Jockey Company has total assets
worth $4,417,665. At year-end it will have net income of $2,771,342 and pay out
60 percent as dividends. If the firm wants no external financing, what is the
growth rate it can
support?
- 30.3%
- 27.3%
- 32.9%
- 25.1%
6. An unrealistic budget is more likely to result when it:
- has been
developed by all levels of
management.
- has been
developed in a top down
fashion.
- has been
developed in a bottom up fashion.
- is
developed with performance appraisal usages in mind.
7. Which of the following financial statements is concerned with
the company at a point in time?
- balance
sheet
- retained
earnings
statement
- statement
of cash flows
- income
statement
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Examination, Part Three
8. Next year Jenkins Traders will pay a
dividend of $3.00. It expects to increase its dividend by $0.25 in each
of the following three years. If their required rate of return if 14
percent, what is the present value of their dividends over the next four years?
- $12.50
- $11.63
- $9.72
- $13.50
9. An activity that has a direct cause-effect relationship with
the resources consumed is a(n):
- product
activity
- cost
driver
- cost
pool
- overhead
rate
10. The major element in budgetary control is:
- the
approval of the budget by the stockholders
- the
valuation of inventories
- the
preparation of long-term plans
- the comparison
of actual results with planned objectives.
11. Tule Time Comics is considering a new show that will
generate annual cash flows of $100,000 into the infinite future. If the initial
outlay for such a production is $1,500,000 and the appropriate discount rate is
6 percent for the cash flows, then what is the profitability index for the
project?
- 0.11
- 1.11
- 0.90
- 1.90
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12. How firms estimate their cost of capital: The WACC for a
firm is 13.00 percent. You know that the firm’s cost of debt capital is 10
percent and the cost of equity capital is 20% What proportion of the firm is
financed with debt?
- 70%
- 50%
- 33%
- 30%
13. The most important information needed to determine if
companies can pay their current obligations is the:
- relationship
between current assets and current
liabilities
- relationship
between short-term and long-term liabilities
- projected
net income for next year
- net income
for this year
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14. Process costing is used when:
- dissimilar
products are involved
- production
is aimed at fulfilling a specific customer
order.
- the
production process is
continuous.
- costs are
to be assigned to specific jobs.
15. A cost which remains constant per unit at various levels of
activity is a:
- fixed cost
- mixed
cost
- manufacturing
cost
- variable
cost
16.The group of users of accounting information charged with
achieving the goals of the business is its:
- investors
- auditors
- creditors
- managers
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17. Teakap, Inc. has current assets of $1,456,312 and total
assets of $4,812,369 for the year ending September 30, 2006. It also has
current liabilities of $1,041,012, common equity of $1,500,000 and retained
earnings of $1,468,347. How much long-term debt does the firm have?
- $803,010
- $2,303,010
- $1,844,022
- $2,123,612
18. The cash conversion cycle?
- begins
when the firm invests cash to purchase the raw materials that would be
used to produce the goods that the firm
manufactures.
- estimates
how long it takes on average for the firm to collect its outstanding
accounts receivables balance.
- begins
when the firm uses its cash to purchase raw materials and ends when the
firm collects cash payments on its credit sales.
- shows how
long the firm keeps its inventory before selling it.
19. Ajax Corp. is expecting the following cash flows - $79,000,
$112,000, $164,000, $84,000, and $242,000 – over the next five years. If
the company’s opportunity cost is 15 percent, what is the present value of
these cash flows? (Round to the nearest dollar.)
- $480,906
- $429,560
- $414,322
- $477,235
20. Jack Robbins is saving for a new car. He needs to have
$21,000 for the car in three years. How much will he have to invest today in an
account paying 8 percent annually to achieve his target? (Round to nearest
dollar)
- $26,454
- $19,444
- $22,680
- $16,670
21. Which of the following presents a summary of changes in a
firm’s balance sheet from the beginning of an accounting period to the end of
that accounting period?
- the
statement of net worth
- the statement
of cash flows
- the
statement of working capital
- the
statement of retained earnings
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22. M&M Proposition 1: Dynamo Corp. produces annual cash
flows of $150 and is expected to exist forever. The company is currently
financed with 75 percent equity and 25 percent debt. Your analysis tells you
that the appropriate discount rates are 10 percent for the cash flows, and 7
percent for the debt. You currently own 10 percent of the stock.
If Dynamo wishes to change its capital structure from 75 percent
equity to 60 percent equity and use the debt proceeds to pay a special dividend
to shareholders, how much debt should they use?
- $225
- $600
- $375
- $321
23. Horizontal analysis is a technique for evaluating a series
of financial statement data over a period of time:
- that has
been arranged from the highest number to the lowest
number.
- to
determine the amount and/or percentage increase or decrease that has taken
place.
- to
determine which items are in
error.
- that has
been arranged from the lowest number to the highest number.
24. Jayadev Athreya has started his first job. He will invest
$5,000 at the end of each year for the next 45 years in a fund that will earn a
return of 10 percent. How much will Jayadev have at the end of 45 years?
- $2,667,904
- $5,233,442
- $1,745,600
- $3,594,524
25. Turnbull Corp. had an EBIT of $247 million in the last
fiscal year. Its depreciation and amortization expenses amounted to $84
million. The firm has 135 million shares outstanding and a share price of
$12.80. A competing firm that is very similar to Turnbull has an enterprise
value/EBITDA multiple of 5.40.
What is the enterprise value of Turnbull Corp.? Round to the
nearest million dollars.
- $1,344
million
- $453.6
million
- $1,315
million
- $1,787
million
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Examination, Part Three
26. Firms that achieve higher growth rates without seeking
external financing:
- Have a low
plowback ratio
- are highly
leveraged
- have less
equity and/or are able to generate high net income leading to a high ROE.
- None of
these
27. In a process cost system, product costs are summarized:
- on job
cost sheets.
- when the
products are sold.
- after each
unit is produced.
- on
production cost reports.
28. The convention of consistency refers to consistent use of
accounting principles:
- within
industries
- among
accounting periods
- throughout
the accounting period
- among
firms
29. If a company’s weighted average cost of capital is less
than the required return on equity, then the
firm:
- is
financed with more than 50%
debt
- is
perceived to be safe
- partnership
- has debt
in its capital structure
30. Your firm has an equity multiplier of 2.47. What is
the debt-to-equity ratio?
- 0
- 1.74
- 0.60
- 1.47
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31. The accumulation of accounting data on the basis of the
individual manager who has the authority to make day-to-day decisions about
activities in an area is called:
- master
budgeting
- static
reporting
- responsibility
accounting
- flexible
accounting
32. Regatta, Inc., has six-year bonds outstanding that pay a
8.25 percent coupon rate. Investors buying the bond today can expect to earn a
yield to maturity of 6.875 percent. What should the company’s bonds be priced
at today? Assume annual coupon payments. (Round to the nearest dollar.)
- $1014
- $972
- $923
- $1,066
33. Variance reports are:
- internal
reports for management
- SEC
financial
reports
- external
financial reports
- all of
these
34. The break-even point is where:
- contribution
margin equals total fixed
costs.
- total
sales equal total variable costs.
- total
sales equal total fixed costs.
- total
variable costs equal total fixed costs.
35. When a company assigns the costs of direct materials, direct
labor, and both variable and fixed manufacturing overhead to products, that
company is using:
- operations
costing
- product
costing
- absorption
costing
- variable
costing
36. Which of the following is considered a hybrid organizational
form?
- sole
proprietorship
- partnership
- limited
liability partnership
- corporation
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37. Gateway, Corp. has an inventory turnover of 5.6.
What is the firm’s days’s sales in inventory?
- 57.9
- 61.7
- 65.2
- 64.3
38. The process of evaluating financial data that change under
alternative courses of action is called:
- incremental
analysis
- contribution
margin
analysis
- cost-benefit
analysis
- double
entry analysis
39. What decision criteria should managers use in selecting
projects when there is not enough capital to invest in all available positive
NPV projects?
- the
modified internal rate of return
- the
profitability index
- the
discounted payback
- the
internal rate of return
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The author is working in the field of education from last 5 years. This article
covers the basic of STR 581 Final Exam Assignment Capstone Two from UOP. Other
topics in the class are as follows:
STR 581 Week 1
Knowledge Check (Latest)
STR 581 Week 1
Complete
STR 581 Week 2
Research Proposal
STR 581 Week 2
Learning Team Activity
STR 581 Week 2
Knowledge Check (Latest)
STR 581 Week 3
External and Internal Environmental Analysis
STR 581 Week 3
Learning Team Peer Evaluation
STR 581 Week 3
Knowledge Check (Latest)
STR 581 Week 3
Complete
STR 581 Week 2
Complete
STR 581 Week 4
Strategic Choice and Evaluation
STR 581 Week 4
Learning Team Peer Evaluation
STR 581 Week 4
Knowledge Check (Latest)
STR 581 Week 4
Complete
STR 581 Week 5
Implementation Strategic Controls and Contingency Plans
STR 581 Week 5
Learning Team Peer Evaluation
STR 581 Week 5
Knowledge Check (Latest)
STR 581 Week 5
Complete
STR 581 Week 6
Strategic Plan and Presentation
STR 581 Week 6
Complete
STR 581 Week 2
Capstone Final Examination, Part One
STR 581 Week 4
Capstone Final Examination, Part Two
STR 581 Week 6
Capstone Final Examination, Part Three
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