1.
A business owned by a single individual is
called a:
a) corporation.
b) sole proprietorship.
c) general partnership.
d) limited partnership.
e)
limited
liability company.
2.
The decisions made by financial managers should
all be ones which increase the:
a) size of the firm.
b) growth rate of the firm.
c) marketability of the managers.
d) market value of the existing owners' equity.
e) firm’s current sales.
3.
The primary goal of financial management is to:
a) maximize current dividends per share of the
existing stock.
b) maximize the current value per share of the
existing stock.
c) avoid financial distress.
d) minimize operational costs and maximize firm
efficiency.
e) maintain steady growth in both sales and net
earnings.
4.
Accounting concepts for a firm to create value
it must:
a) have a greater cash inflow from its
stockholders than its outflow to them.
b) create more cash flow than it uses.
c) reduce its investment in fixed assets since
fixed assets require the use of cash.
d) avoid payments to the government so dividends
can be increased.
e) avoid the issuance of debt securities
Find the week 1 connect problems answers
here FIN 571
Week 1 Connect Problems
5.
The primary goal of financial management is to:
a) maximize current dividends per share of the
existing stock.
b) maximize the current value per share of the
existing stock.
c) avoid financial distress.
d) minimize operational costs and maximize firm
efficiency.
e) maintain steady growth in both sales and net
earnings.
6.
Which one of the following business types is
best suited to raising large amounts of capital?
a) sole proprietorship
b) limited liability company
c) corporation
d) general partnership
e) limited partnership
7.
Accounting profits and cash flows are generally:
a) the same since they reflect current laws and
accounting standards.
b) the same since accounting profits reflect when
cash flows occur.
c) different because of GAAP rules regarding the
recognition of income.
d) different because cash inflows must occur
before revenue recognition.
e) the same due to the requirements of GAAP.
8.
Some time ago, Julie purchased eleven acres of
land costing $15,490. Today, that land is valued at $49,957. How long has she
owned this land if the price of the land has been increasing at 5 percent per
year?
a) 24.00 years
b) 23.51 years
c) 24.13 years
d) 23.67 years
e) 23.72 years
9.
What is the future value of $3,088 invested
for 11 years at 6.00 percent compounded annually?
a) $5,510.23
b) $5,841.06
c) $5,861.95
d) $5,882.83
e) $1,563.45
10.
One year ago, you invested $3,440. Today it is
worth $3,700.50. What rate of interest did you earn?
a) 7.18 percent
b) 7.57 percent
c) 7.52 percent
d) 7.50 percent
e) 7.04 percent
11.
First City Bank pays 7 percent simple interest
on its savings account balances, whereas Second City Bank pays 7 percent
interest compounded annually.
If you made a $73,000 deposit in each bank,
how much more money would you earn from your Second City Bank account at the
end of 9 years? (Do not round intermediate calculations and round your answer
to 2 decimal places, e.g., 32.16.)
Difference in accounts $__________
12.
a. Compute the future value of $1,000
compounded annually for 20 years at 6 percent. (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
Future value $__________
b. Compute the future value of $1,000
compounded annually for 15 years at 9 percent. (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
Future value $__________
c. Compute the future value of $1,000
compounded annually for 25 years at 6 percent. (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
Future value $__________
Final Exam Answers just a click away Final Exam (Newest)
13.
For each of the following, compute the present
value (Do not round intermediate calculations and round your answers to 2
decimal places, e.g., 32.16.):
a) Present Value Years Interest Rate Future
value
b) $__________ 12 6% $ 15,651
c) $__________ 3 12 53,557
d) $__________ 28 13 888,073
e) $__________ 30 10 552,164
14.
Wilkinson Co. has identified an investment
project with the following cash flows:
Year Cash Flow
1 $ 880
2 1,250
3 1,510
4 1,675
If the discount rate is 8 percent, what is the
present value of these cash flows? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
Present value $ __________
If the discount rate is 20 percent, what is
the present value of these cash flows? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)
Present value $ __________
If the discount rate is 30 percent, what is
the present value of these cash flows? (Do not roundintermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)
Present value $ __________
15.
You own 300 shares of Western Feed Mills stock
valued at $36.72 per share. What is the dividend yield if your annual dividend
income is $322?
a) 2.9 percent
b) 4.5 percent
c) 3.2 percent
d) 11.4 percent
e) 9.2 percent
16.
Suppose a stock had an initial price of $82 per
share, paid a dividend of $1.20 per share during the year, and had an ending
share price of $90.
Compute the percentage total return. (Do not
round intermediate calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
Total return __________%
17.
You’ve observed the following returns on
SkyNet Data Corporation’s stock over the past five years: 10 percent, –10
percent, 17 percent, 22 percent, and 10 percent. Suppose the average inflation
rate over this period was 1.5 percent, and the average T-bill rate over the
period was 3 percent.
a. What was the average real return on the
stock? (Do not round intermediate calculations and enter your answer as a
percent rounded to 2 decimal places, e.g., 32.16.)
Average real return __________%
b. What was the average nominal risk premium
on the stock? (Do not round intermediate calculations and enter your answer as
a percent rounded to 1 decimal place, e.g., 32.1.)
Average nominal risk premium __________%
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