FIN
370 Final Exam
1.
The Securities Investor Protection Corporation protects individuals from
- brokerage firm
failures
- making poor
investment decisions
- fraud by
corporations
- other investors
who fail to make delivery
2.
You just purchased a parcel of land for $10,000. If you expect a 12% annual
rate of return on your investment, how much will you sell the land for in 10
years?
- $38,720
- $39,720
- $31,060
- $25,000
Click
here and download FIN
370 Final Exam
3.
When calculating the weighted average cost of capital, which of the following
has to be adjusted for taxes?
- Debt
- Preferred stock
- Retained
earnings
- Common stock
4.
Buying and selling in more than one market to make a riskless profit is called:
- profit
maximization.
- globalization
- arbitrage.
- international
trading.
Click
here and download FIN 370
Entire Course
5.
Which of the following is true about bonds?
- They have a
fixed maturity, and they pay an amount equal to the maturity value times
the coupon rate each year.
- At maturity of
the bond, the investor receives the market price of the bond.
- They are
obligations from the investor to the corporation.
- Their interest
rate always varies with the Consumer Price Index
6.
Compute the payback period for a project with the following cash flows, if the
company's discount rate is 12%.
Initial
outlay = $450
Cash
flows: Year 1 = $325
Year 2 = $65
Year 3 = $100
- 3.17 years
- 2.6 years
- 2.88 years
- 3.43 years
Complete
paper here FIN
370 Week 5 Final Exam
7.
Which of the following best describes why cash flows are utilized rather than
accounting profits when evaluating capital projects?
- Cash flows have
a greater present value than accounting profits.
- Cash flows
improve the tax position of a firm more than accounting profits.
- Cash flows are
more stable than accounting profits.
- Cash flows
reflect the timing of benefits and costs more accurately than accounting
profits.
8.
Delta Inc. is considering the purchase of a new machine which is expected to
increase sales by $10,000 in addition to increasing non-depreciation expenses
by $3,000 annually. Due to the sales increase, Delta expects its working
capital to increase $1,000 during the life of the project. Delta will
depreciate the machine using the straight-line method over the project's five
year life to a salvage value of zero. The machine's purchase price is $20,000.
The firm has a marginal tax rate of 34 percent, and its required rate of return
is 12 percent. The machine's initial cash outflow is:
- $23,000.
- $20,000.
- $27,000.
- $21,000.
Click
here to download Complete Answers of FIN 370
Complete Answers
9.
Which of the following is most likely to occur if a firm over-invests in net
working capital?
- The return on
investment will be lower than it should be.
- The times
interest earned ratio will be lower than it should be.
- The current
ratio will be lower than it should be.
- The quick ratio
will be lower than it should be.
10.
Metals Corp. has $2,575,000 of debt, $550,000 of preferred stock, and
$18,125,000 of common equity. Metals Corp.'s after-tax cost of debt is 5.25%,
preferred stock has a cost of 6.35%, and newly issued common stock has a cost
of 14.05%. What is Metals Corp.'s weighted average cost of capital?
- 8.32%
- 6.56%
- 10.84%
- 12.78%
Find
the final exam answers here FIN
370 Final Exam
11.
Which of the following financial ratios is the best measure of the operating
effectiveness of a firm's management?
- Return on
investment
- Gross profit
margin
- Current ratio
- Quick ratio
12.
We compute the profitability index of a capital-budgeting proposal by Initial
outlay = $1,748.80
- dividing the
present value of the annual after-tax cash flows by the cost of capital.
- multiplying the
cash inflow by the IRR.
- multiplying the
IRR by the cost of capital.
- dividing the
present value of the annual after-tax cash flows by the cost of the
project.
Want
to download the Complete Assignment..?? Click FIN 370
Complete Questions With Answers
13.
A company collects 60% of its sales during the month of the sale, 30% one month
after the sale, and 10% two months after the sale. The company expects sales of
$10,000 in August, $20,000 in September, $30,000 in October, and $40,000 in
November. How much money is expected to be collected in October?
- $15,000
- $35,000
- $25,000
- $45,000
14.
Which of the following could offset the higher risk exposure a company would
face if it’s current ratio and net working capital were relatively low?
- Its accounts
receivable collection policy could increase the average collection period.
- It could offer
no discounts for early payment by its customers.
- It could buy
back some of its shares in the open market in order to reduce its equity.
- Its current assets would need to be highly liquid.
Final Exam Answers just a click away FIN 370 Week 5 Final Exam
15.
The Oviedo Thespians are planning to present performances of their Florida
Revue on 2 consecutive nights in January. It will cost them $5,000 per night
for theater rental, event insurance and professional musicians. The theater
will also take 10% of gross ticket sales. How many tickets must they sell at
$10.00 per ticket to raise $1,000 for their organization?
- 1,314 tickets
- 1,112 tickets
- 1,223 tickets
- 1000 tickets
16.
Aspects of demand risk controllable by the firm include:
- product
quality.
- interest rates.
- entry of
external competitors.
- status of the
regional and national economy.
Want
to download the Complete Assignment..?? Click FIN 370
Complete Course
17.
Which of the following is true regarding Investment Banks?
- As of 2010,
stand alone Investment banks are numerous.
- Under the
Glass-Steagal act, commercial banks were allowed to operate as Investment
banks.
- As a result of
the financial crisis of 2008, all stand-alone Investment banks either
failed, were merged into commercial banks, or became commercial banks.
- When
Glass-Steagal was repealed in 1999, commercial banks and Investment banks
had to be separate entities.
18.
Given an accounts receivable turnover of 8 and annual credit sales of $362,000,
the average collection period (360-day year) is
- 60 days.
- 75 days
- 90 days.
- 45 days.
Final
Exam Answers just a click away FIN
370 Final Exam Answers
19.
When the impact of taxes is considered, as the firm takes on more debt
- there will be
no change in total cash flows.
- cash flows will
increase because taxes will decrease.
- the weighted
average cost of capital will increase.
- both taxes and
total cash flow to stockholders and bondholders will decrease.
20.
If you have $20,000 in an account earning 8% annually, what constant amount
could you withdraw each year and have nothing remaining at the end of five
years?
- $5,008.76
- $3,525.62
- $3,408.88
- $2,465.78
Want
to download the Complete Assignment..?? Click FIN 370
Complete Questions With Answers
21.
Apple Two Enterprises expects to generate sales of $5,950,000 for fiscal 2014;
sales were $3,450,000 in fiscal 2013. Assume the following figures for the
fiscal year ending 2013: cash $70,000; accounts receivable $250,000; inventory
$400,000; net fixed assets $520,000; accounts payable $235,000; and accruals
$155,000. Use the percent-of-sales method to forecast cash for the fiscal year
ending 2014.
- $75,003
- $216,418
- $120,725
- $319,604
22.
If managers are making decisions to maximize shareholder wealth, then they are
primarily concerned with making decisions that should:
- maximize sales
revenues
- either increase
or have no effect on the value of the firm's common stock.
- increase the
market value of the firm's common stock.
- positively
affect profits.
Want
more details? Download now FIN
370 Final Exam
23.
Project Sigma requires an investment of $1 million and has a NPV of $10.
Project Delta requires an investment of $500,000 and has a NPV of $150,000. The
projects involve unrelated new product lines. What is your evaluation of these
two projects?
- Only project
Delta should be accepted. Alpha's NPV is too low for the investment.
- Neither project
should be accepted because they might compete with one another
- The company
should look at other investment criteria, not just NPV.
- Both projects
should be accepted because they have positive NPV's
24.
Capital Structure Theory in general assumes that:
- A firm's value
is determined by discounting the firm's expected cash flows by the WACC.
- A firm's cost
of capital rises as a firm uses more financial leverage.
- A firm's value
is determined by capitalizing (discounting) the firm's expected net income
by the firm's cost of equity.
- A firm's cash
flows will grow indefinitely at a constant rate.
Want
help? Click to download FIN
370 Complete Course
25.
Which of the following best describes why cash flows are utilized rather than
accounting profits when evaluating capital projects?
- Cash flows
reflect the timing of benefits and costs more accurately than accounting profits.
- Cash flows have
a greater present value than accounting profits.
- Cash flows
improve the tax position of a firm more than accounting profits.
- Cash flows are
more stable than accounting profits.
26.
Which of the following is not part of the underwriting process?
- the syndicate
- the prospectus
- the Federal
Reserve
- the Securities
and Exchange Commission
Final
Exam Answers just a click away FIN
370 Final Exam Answers
27.
Long-term financial plans typically encompass:
- 6 to 12 months.
- 5 to 10 years.
- about 5 years.
- the entire
lifecycle of the corporation.
28.
Accounting break-even analysis solves for the level of sales that will result
in:
- IRR = Cost of
Capital.
- net income =
$0.00.
- Free cash flow
= $0.00.
- NPV = $0.00.
To
download the complete paper click FIN 370
Entire Course
29.
Which of the following statements best represents what finance is about?
- How political,
social, and economic forces affect corporations
- Reducing
risk
- Creation and
maintenance of economic wealth
- Maximizing
profits
30.
Which of the following goals is in the best long-term interest of stockholders?
- Risk
minimization
- Maximizing of
the market value of the existing shareholders' common stock
- Maximizing
sales revenues
- Profit maximization
About
Author
This article covers the topic for the
University Of Phoenix FIN
571 Final Exam . The author is working in the field of education from last 5
years. This article covers the basic of FIN 571 Final
Exam Assignment from UOP. Other topics in the
class are as follows:
No comments:
Post a Comment