OneClass: TWO: Which of the following elements is a part of relevant cash flow? a.Net income b.Deprec...

Hello, I am having trouble with my financial homework. I was wondering if I could compare my answers (explaining the answer is much appreciated, but not necessary)

1) Which of the following ratios is not a liquidity ratio?

A) ROE

B) Current

C) Quick

D) Recievables turnover

E) None of the above

2) Which of the following methods does not consider the time value of money?

A) IRR

B) NPV

C) Payback

D) None of the above

33) Which of the following limits a firms ability to rasie equity through retaied earnings?

A) Set dividend policy

B) Low P/E

C) High P/E

D) None of the above

4) Ellison corporation acquires Redstone corporation because Redstone has unused production facilities that Ellison needs. This is an example of....

A) Diversification

B) Vertical Integration

C) Horizontal Integration

D) None of the Above

5) Gilber Jones is saving for a new outboard motor. he needs to have $10000 four years from now. How much must he set aside now to have $10000 four years from now if money compounds 12% annually?

A) $6310

B $6355

C) $6332

D) $6106

E) none of the above

6) James Company acquires Johns company. Johns is in a totally unrelated business to James. This is an example of....

A) Vertical integration

B) Horizontal integration

C) Diversification

D) None of the above

7) Projected sales growth assumes.....

A) Adequate asset base

B) Decrease in property, plant, and equipment

C) Decrease in accounts receivable

D) Decrease in inventory

E) None of the above

8) Aspect company acquires Penn company, which is downstream in the production chain. This is an example of....

A) Diversification

B) Vertical Integration

C) Horizontal Integration

D) None of the above

9) If the bond's coupon rate is greater than the general interest rates in the market, the bond will sell at a.....

A) Premium

B) Discount

C) Neither A nor B

Hello, I am having some trouble with my Finance homework. I was wondering if someone could check the answers for me. (explanations are very helpful, but not necesary)

1) How much money will Jane Mims have in three years if the money compounds at an annual rate of 10% and she sets aside $1000

A) $1300

B)$1331

C) $1406

D) $1420

E) None of the Above

2) As the interest rate used to discount future cash flows is decreased, present value of the future cash inflows....

A) Increases

B) Decreases

C) Stays the Same

3) The ratio which many observers use to quantify the stock market's opinion of a firm is the....

A) ROE

B) EPS

C) D/E

D) P/E

E) None of the above

4) Compound rates, not discount rates, are used in an attempt to....

A) Screen out weak investments

B) quantify the firm's opportunity costs

C) Quantify the Firm's risk

D) A & B

E) None of the above

5) If Carla Rice puts $200 in the bank for nine years, and the money compounds at 7% annually, how much will Carla have at the end of the nine year period?

A) $362

B) $368

C) $374

D) $381

E) None of the Above

6) Adrian Ardell is saving for a new guitar. How much must Adrian set aside now to receive $4000, seven years from nowusing a compound interest rate of 7% annually?

A) $2400

B) $2491

C) $2411

D) $2500

E) None of the Above

7) Which of the following would be included among the investment numbers of a capital budget?

A) Purchase price of the asset

B) Trade - In - Value of an asset being replaced

C) Investment tax credit from acquistion

D) Installation costs of the Machinery

E) All of the above

8) Synergy between two companies

A) Is the complementary situation where value is created in the joining of the firms

B) May result in the improvement of the acquire's bottom line

C)Could be defined by purely qualitative benefits

D) A & C

E) A, B, & C

9) Gadsen acquires Digital corporation which is upstream in the marketing chain. This is an example of....

A) Diversification

B) Vertical Integration

C) Horizontal Integration

D) None of the Above

10) The cost of capital can be defined as

A) the weighted average cost of attracting investors to the firm

B) The price of obtaining funding for the firm, weighted according to target ratios in the capital structure

C) Less than the weighted average return that investors in the firm require

D) A & B

E) A, B,& C

1.Ellison corporation acquires redstone corporation because redston has unused production facilities that Ellison needs. This is an example of

a.diversification

b. vertical integration

c. Horizontal integration

d. None of the above

2. Synergy may result from which of the following?

a. Enhanced cash flow

b. Diversification

c. Excess cash

d. All of the above

3.Which of the following is not a qualitative factor?

a. Product users

b. Industry maturity

c. Sales of growth

d. Barriers to entry

e. None of the above

4.Present value calculations

a. Can help the creation of value

b. Can provide managers with a means of identifying the best investment choices.

c. Do not help in the creation of value

d. A and b

e. B and c

5. Which of the following ratios makes firm comparisons difficult?

1. EPS

2. Payout

3. Return on assets

4. ROE

5. None of the above

6. Breakeven EBIT analysis leads to

a. Issuance of debt

b. Issuance of stock

c. Both a and b

d. Either a or b

e. None of the above

7. If the bondâs coupon rate is greater than the general interest rates in the market, the bond will set at a

A. premium

b. discount

c. neither a nor b

8. As the interest rate used to discount future cash flows is decreased, present value of the future inflows

a. Increases

b. Decreases

c. Stays the same

9. The ______________ matches revenues with expenses for the entire accounting period

a. Balance sheet

b. Cash flow statement

c. Statement of retained earnings

d. Income statement

e. None of the above

10. What performing sensitivity analysis

a. Statistical methods should not be employed

b. Electronic spreadsheets make the job more manageable

c. Assumptions should be changed one at a time

d. All of the above

e. B and c

11.Jones is saving for a new outboard motor. He needs to have 10,000 4 years from now. How much must he set aside not have 10,000, 4 years from now if money compounds at 12% annually.

a.$6310

b. $6355

c. $6332

d. $6106

e. None of the above

12.A firms dividend policy impacts the firmâs ability to finance through

a. Retained earnings

b.Stock issue

c. Long term debt

d. None of the above

13. Synergy between two companies

a. Is the complimentary situation where value is created in the joining o the firms

b. May result in the improvement of the acquirers bottom line

c. Could be defined by purely qualitative benefits

d. A and c

e. B and c

15. The percentage of net income that a company distribution in dividends is referred to as the

a. EPS

b. Payout ratio

c. ROA

d. ROE

e. None of the above

16. The statement that shows investment is the firms and the distributions to owners is the

a. Income statement

b. Balance sheet

c. Statement of retained earnings

d. None of the above

17. Which of the following methods results in a net present value of zero?

a. IRR

b. Payback

c. Discounted payback

d. None of the above

18. Ivy company acquires Reynolds company. Reynolds is in a totally unrelated business to Ivy. This is an example of

a. Vertical integration

b. Horizontal integration

c. Diversification

d. None of the above

19. Which of the following limits a firmâs ability to raise equity through retained earnings?

a. Set divided policy

b. Low p/e

c. High p/e

d. None of the above

20. Testing the validity of your calculations by subjecting them to change is known as

a. Qualitative testing

b. Horizontal analysis

c. Vertical analysis

d. Sensitivity analysis

e. None of the above

21. Gadsen acquires digital corporation which is upstream in the marketing chain. This is an example of

a. Diversification

b. Vertical integration

c. Horizontal integration

d. None of the above

22. Which of the following methods help to âsizeâ the investment?

a. Payback

b. Present value payback

c. Present value index

d. IRR

e. None of the above

22. Aspect company acquires Penn company which is downstream in the production chain. This is an example of

a. Diversification

b. Vertical integration

c. Hortizontal integration

d. None of the above

23.The âefficient marketâ theory means to be reasonable because

a.There are fewer financial analysts valuing securities

b.There are hundreds of investors trying to make money from improperly valued securities, and the market forces which result in driving stock prices to fair value.

c. A and b

d. None of the above

24. Economic value is the same as

a. Book value/ net asset value

b. Owners equity

c. None of the above

25.When projected assets are more than projected liabilities and owners equity the plug will be

a. Notes payable

b. Notes receivable

c. Cash

d. None of the above

26. In a new issue, the ____ are those funds that remain after the neccessry fees have been deducted

a.Working capital

b.Free cash flow

c.Net proceeds

d.None of the above

27.A discount factor

a.Is the same as compounding future cash flows

b.Performs the reverse function of a compounding interest rate

c.Allows investors to quantify a figure which will assist them in comparing alternative investments

d.B and c

e.A, b, and c

28.Which of the following ratios is not a liquidity ratio?

a.ROE

b.Current

c.Quick

d.Receivable turnover

e.None of the above

29.Adrian Ardeel is saving for a new guitar. How much must Adrian set aside now to receive $4000, 7 years from now using a compound interest rate of 7% annually.

a.$2400

b.$2491

c.$2411

d.$2500

e.None of the above

30.The bondâs yield to maturity calculation is similar to a ______ calculation

a.NPV

b.IRR

c.Payback

d.Discounted payback

e.None of the above

31.Eric sets aside $100. If this money compounds at a 5%annual rate how much will Eric have 6 years from now?

a.$110

b.$121

c.$134

d.$138

e.None of the above

32.Which of the following methods does not consider the time value of money?

a.IRR

b.NPV

c.Payback

d.None of the above

33.Assessing key ratios of the company is an example of

a.Qualitative analysis

b.Quantitative analysis

c.Price level effect

d.Fixed cost

e.None of the above

34.The ratio which may observers use to quantify the stock markets opinion of a firm is the

a.ROE

b.EPS

c.D/E

d.P/E

e.None of the above

35.A bond which is valued at par has a yield to maturity which is _____ to its coupon rate

a.Equal to

b.Greater than

c.Less than

d.None of the above

36.Many coverage ratios include

a.Sinking fund obligations

b.Dividends

c.Both a and b

d.None of the above

37.The cost of capital can be defined as

a.The weighted average cost of attracting investors to the firm

b.The price of obtaining funding for the firm weighed according to target ratios in the capital structure

c.Less than the weighted average that investors in the firm require

d.A and b

e.A, b, and c

38.Most bonds pay interest

a.Monthly

b.Quarterly

c.Semiannually

d.Annually

e.None of the above

39.The quantitative method that often serves as an indicator of a firms ability to meet contractual obligations is

a.Receivables turnover

b.Inventory turnover

c.ROE

d.Coverage ratio

e.None of the above

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