Samantha opened a savings account this morning.

Her money will earn

5 percent interest, compounded annually. After five years, her savings
account will be worth $5,600. Assume she will not make any
withdrawals. Given this, which one of the following statements is true?
Select one:
a.
Samantha deposited more than $5,600 this morning.
b.
Samantha could have deposited less money and still had $5,600 in five years if she could
have earned 5.5 percent interest.
c.
The present value of Samantha's account is $5,600.
d.
Samantha would have had to deposit more money to have $5,600 in five years if she could
have earned 6 percent interest.
e.
Samantha will earn an equal amount of interest every year for the next five years.

If a project has a net present value equal to zero, then:

Select one:
a.
a decrease in the project's initial cost will cause the project to have a negative NPV.
b.
the project earns a return exactly equal to the discount rate.
c.
the total of the cash inflows must equal the initial cost of the project.
d.
the project's PI must be also be equal to zero.
e.
any delay in receiving the projected cash inflows will cause the project to have a positive
NPV.

Andre's Bakery has sales of $687,000 with costs of $492,000. Interest

expense is $26,000 and depreciation is $42,000. The tax rate is 35
percent. What is the net income?
Select one:
a.
$44,450
b.
$82,550
c.
$42,750
d.
$124,550
e.
$86,450
You just received an insurance settlement offer related to an accident you had six
years ago. The offer gives you a choice of one of the following three offers:

- Option A: $1,565 a month for 72 months.

- Option B: $1,012 a month for 10 years.
-Option C: $100,000 as a lump sum payment today.

You can earn 7.5 percent on your investments. You do not care if you personally
receive the funds or if they are paid to your heirs should you die within the
settlement period. Which one of the following statements is correct given this
information?
Select one:
a.
You are indifferent to the three options as they are all equal in value.
b.
Option A is the best choice as it provides the largest monthly payment.
c.
Option C is the best choice because it is has the largest current value.

d.
Option B is the best choice because you will receive the most payments.
e.
Option B is the best choice because it pays the largest total amount.
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: Option C is the best choice because it is has the largest current value.

Câu Hỏi 2
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The Corner Hardware has succeeded in increasing the amount of goods it sells while
holding the amount of inventory on hand at a constant level. Assume that both the
cost per unit and the selling price per unit also remained constant. This
accomplishment will be reflected in the firm's financial ratios in which one of the
following ways?
Select one:
a.
decrease in the day's sales in inventory

b.
decrease in the net working capital turnover rate
c.
decrease in the inventory turnover rate
d.
no change in the fixed asset turnover rate
e.
no change in the total asset turnover rate
Phản hồi
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The correct answer is: decrease in the day's sales in inventory

Câu Hỏi 3
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Boyer Enterprises had $200,000 in 2011 taxable income. What is the firm's average
tax rate based on the rates shown in the following table?

Taxable Income Tax Rate

$0 – 50,000 15%
50,001 – 75,000 25%
75,001 – 100,000 34%
101,000 – 335,000 39%

Select one:
a.
36.50 percent
b.
30.63 percent

c.
28.25 percent
d.
39.00 percent
e.
32.48 percent
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: 30.63 percent

Câu Hỏi 4
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Consider the following two mutually exclusive projects:

Year Project A Project B

0 -$318,844 -$27,476
1 27,700 9,057
2 56,000 10,536
3 55,000 11,849
4 399,000 13,814

The required return is 15 percent for both projects. Which one of the following
statements related to these projects is correct?
Select one:
a.
NPV, IRR, and PI all imply accepting Project A.
b.
The IRR decision rule should be used as the basis for selecting the project in this situation.
c.
Because both the IRR and the PI imply accepting Project B, that project should be accepted.
d.
Only NPV implies accepting Project A.

e.
The profitability rule implies accepting Project A.
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: Only NPV implies accepting Project A.

Câu Hỏi 5
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Which one of the following statements is correct?

Select one:
a.
An increase in the depreciation expense will not affect the cash coverage ratio.

b.
An equity multiplier of 1.2 means a firm has $1.20 in sales for every $1 in equity.
c.
If the total debt ratio is greater than .50, then the debt-equity ratio must be less than 1.0.
d.
The debt-equity ratio can be computed as 1 plus the equity multiplier.
e.
Long-term creditors would prefer the times interest earned ratio be 1.4 rather than 1.5.
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: An increase in the depreciation expense will not affect the cash
coverage ratio.

Câu Hỏi 6
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Reliable Cars has sales of $807,200, total assets of $1,105,100, and a profit margin
of 9.68 percent. The firm has a total debt ratio of 78 percent. What is the return on
equity?
Select one:
a.
32.14 percent

b.
17.68 percent
c.
13.09 percent
d.
16.67 percent
e.
28.56 percent
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: 32.14 percent

Câu Hỏi 7
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You are considering a project with conventional cash flows and the following
characteristics:

Internal Rate of Return 11.63%

Profitability Ratio 1.04
Net present value $987
Payback period 2.98 years

Which of the following statements is correct given this information?

I. The discount rate used in computing the net present value was less than 11.63
percent.
II. The discounted payback period must be more than 2.98 years.
III. The discount rate used in the computation of the profitability ratio was 11.63
percent.
IV. This project should be accepted as the internal rate of return exceeds the
required return.
Select one:
a.
I, II, and IV only

b.
I, II, III, and IV
c.
II, III, and IV only
d.
I and II only
e.
III and IV only
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: I, II, and IV only

Câu Hỏi 8
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If a firm produces a twelve percent return on assets and also a twelve percent
return on equity, then the firm:
Select one:
a.
is using its assets as efficiently as possible.
b.
has an equity multiplier of 1.0.

c.
has a debt-equity ratio of 1.0.
d.
may have short-term, but not long-term debt.
e.
has no net working capital.
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: has an equity multiplier of 1.0.

Câu Hỏi 9
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Which one of the following terms is defined as a conflict of interest between the
corporate shareholders and the corporate managers?
Select one:
a.
articles of incorporation
b.
agency problem

c.
legal liability
d.
corporate breakdown
e.
bylaws
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: agency problem

Câu Hỏi 10
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The Wine Press is considering a project which has an initial cash requirement of
$187,400. The project will yield cash flows of $2,832 monthly for 84 months. What
is the rate of return on this project?
Select one:
a.
7.28 percent
b.
7.41 percent
c.
7.56 percent
d.
7.04 percent

e.
6.97 percent
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: 7.04 percent

Câu Hỏi 11
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Which one of the following will increase the value of a firm's net working capital?
Select one:
a.
purchasing inventory on credit
b.
depreciating an asset
c.
selling inventory at a profit

d.
collecting an accounts receivable
e.
using cash to pay a supplier
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: selling inventory at a profit
Câu Hỏi 12
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Beach Wear has current liabilities of $350,000, a quick ratio of 1.65, inventory
turnover of 3.2, and a current ratio of 2.9. What is the cost of goods sold?
Select one:
a.
$1,400,000

b.
$1,560,000
c.
$980,000
d.
$1,200,000
e.
$1,060,000
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: $1,400,000

Câu Hỏi 13
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Which one of the following is a capital structure decision?

Select one:
a.
determining the amount of funds needed to finance customer purchases of a new product
b.
determining how much inventory will be needed to support a project
c.
determining which one of two projects to accept
d.
determining how much debt should be assumed to fund a project

e.
determining how to allocate investment funds to multiple projects
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: determining how much debt should be assumed to fund a project

Câu Hỏi 14
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Which of the following questions are addressed by financial managers?

I. How should a product be marketed?
II. Should customers be given 30 or 45 days to pay for their credit purchases?
III. Should the firm borrow more money?
IV. Should the firm acquire new equipment?
Select one:
a.
I, II, and III only
b.
II and III only
c.
I, II, III, and IV
d.
I and IV only
e.
II, III, and IV only

Phản hồi
Câu trả lời của bạn đúng
The correct answer is: II, III, and IV only

Câu Hỏi 15
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You just received $225,000 from an insurance settlement. You have decided to set
this money aside and invest it for your retirement. Currently, your goal is to retire
25 years from today. How much more will you have in your account on the day you
retire if you can earn an average return of 10.5 percent rather than just 8 percent?
Select one:
a.
$1,050,423
b.
$1,818,342
c.
$1,189,576

d.
$417,137
e.
$689,509
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: $1,189,576

Câu Hỏi 16
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Webster World has sales of $12,900, costs of $5,800, depreciation expense of

$1,100, and interest expense of $700. What is the operating cash flow if the tax
rate is 32 percent?
Select one:
a.
$5,749
b.
$7,036
c.
$4,704
d.
$5,404

e.
$7,100
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: $5,404

Câu Hỏi 17
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The Chandler Group wants to set up a private cemetery business. According to the
CFO, Barry M. Deep, business is "looking up". As a result, the cemetery project will
provide a net cash inflow of $57,000 for the firm during the first year, and the cash
flows are projected to grow at a rate of 7 percent per year forever. The project
requires an initial investment of $759,000. The firm requires a 14 percent return on
such undertakings. The company is somewhat unsure about the assumption of a 7
percent growth rate in its cash flows. At what constant rate of growth would the
company just break even?
Select one:
a.
5.61 percent
b.
6.49 percent

c.
5.29 percent
d.
6.75 percent
e.
4.48 percent

Câu Hỏi 18
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Andre's Bakery has sales of $687,000 with costs of $492,000. Interest expense is
$26,000 and depreciation is $42,000. The tax rate is 35 percent. What is the net
income?
Select one:
a.
$44,450
b.
$82,550

c.
$42,750
d.
$124,550
e.
$86,450
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: $82,550
Câu Hỏi 19
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If a project has a net present value equal to zero, then:

Select one:
a.
a decrease in the project's initial cost will cause the project to have a negative NPV.
b.
the project earns a return exactly equal to the discount rate.

c.
the total of the cash inflows must equal the initial cost of the project.
d.
the project's PI must be also be equal to zero.
e.
any delay in receiving the projected cash inflows will cause the project to have a positive
NPV.
Phản hồi
Câu trả lời của bạn đúng
The correct answer is: the project earns a return exactly equal to the discount rate.

Câu Hỏi 20
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Samantha opened a savings account this morning. Her money will earn 5 percent
interest, compounded annually. After five years, her savings account will be worth
$5,600. Assume she will not make any withdrawals. Given this, which one of the
following statements is true?
Select one:
a.
Samantha deposited more than $5,600 this morning.
b.
Samantha could have deposited less money and still had $5,600 in five years if she could
have earned 5.5 percent interest.

c.
The present value of Samantha's account is $5,600.
d.
Samantha would have had to deposit more money to have $5,600 in five years if she could
have earned 6 percent interest.
e.
Samantha will earn an equal amount of interest every year for the next five years.

Al owns 800 shares of

The Good Life Co. The
company recently issued
a statement that it
will pay a dividend per
share of $0.55 this year
and a $0.60 per share
dividend next year. Al
does not want any
dividend income this year
but does want as much
dividend income as
possible next year. Al
earns 8.5 percent on his
investments. Ignoring
taxes, what will Al's total
homemade dividend be
next year?
A. $910.20
B. $920.00
C. $930.50
D. $941.80
E. $957.40 (Homemade
dividend income for next
year = [($0.55 x 1.085) +
$0.60] x 800 =
$957.40)
Al owns 800 shares of
The Good Life Co. The
company recently issued
a statement that it
will pay a dividend per
share of $0.55 this year
and a $0.60 per share
dividend next year. Al
does not want any
dividend income this year
but does want as much
dividend income as
possible next year. Al
earns 8.5 percent on his
investments. Ignoring
taxes, what will Al's total
homemade dividend be
next year?
A. $910.20
B. $920.00
C. $930.50
D. $941.80
E. $957.40 (Homemade
dividend income for next
year = [($0.55 x 1.085) +
$0.60] x 800 =
$957.40)