A comprehensive nonfinancial size-up should be done: A) monthly. B) quarterly. C) annually. D) as needed. E) All of the above. ANSWER C
Date: September 19th, 2020
Many firms in a particular industry strive to have very similar capital structures. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
When a firm stretches accounts payable without hurting its credit rating, the cost of giving up a cash discount is ________. A) reduced B) increased C) unaffected D) increased or decreased depending on the opening accounts payable balance ANSWER A
Date: September 19th, 2020
Management statements is a third technique identified by the author as a method of determining the appropriate weights for WACC calculations. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A comprehensive nonfinancial size-up is a useful tool for: A) financial managers. B) lenders. C) investors. D) All of the above. ANSWER D
Date: September 19th, 2020
The profitability index is the right but not the obligation to make a business decision. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Your firm has a beginning balance of $8,000 cash, $2,000 inventory, and $10,000 initial equity. Your firm is operating in an all-cash environment without taxes. You sold $1,000 of inventory for three times the amount you paid for it. If this is your only transaction, your resulting balance sheet should most closely resemble which of […]
Date: September 19th, 2020
If Home Depot has before-tax earnings of $7,000,000, Pays $2,400,000 in taxes, has no preferred stock, and a beta of 1.20, what is the firm’s current average tax rate? A) 33.33% B) 34.29% C) 35.00% D) 36.14% ANSWER B Explanation: B) Current tax rate = taxes payable/before-tax earnings = $2,400,000/$7,000,000 = 34.29%.
Date: September 19th, 2020
Tangshan Mining has 100,000 shares outstanding and just declared a 3-for-2 stock split. Before the announcement, the firm’s shares were trading at $50.00 per share. After the stock split, the firm’s shares should trade at ________ per share. A) $33.33 B) $66.67 C) $75.00 D) $100.00 ANSWER A
Date: September 19th, 2020
The modified internal rate of return method of capital budgeting was developed to overcome shortfalls in the net present value method. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
