The cost of giving up a cash discount on a credit purchase is ________. A) added on to the price of the goods in order to make payment quickly B) deducted from the price of the goods in order to make payment quickly C) the implied interest rate paid in order to delay payment for […]
Date: September 19th, 2020
The motive to pay stock dividend to retain cash to satisfy past-due bills, may result in a decline in market value. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A firm with a beta of 2.0 should: A) be forced to stop trading until the market perceives less risk. B) require twice the return on the market portfolio. C) require twice the market risk premium. D) require twice the risk-free rate of return. ANSWER C
Date: September 19th, 2020
Which of the following capital budgeting evaluation techniques does NOT have an available Excel function? A) NPV B) IRR C) MIRR D) Excel contains each of these functions. ANSWER D
Date: September 19th, 2020
To determine the cash flow from operating activities, certain adjustments must be made which include A) Add back depreciation, amortization, and stock-based compensation expenses. B) Adjust for any changes in operating assets and liabilities. C) Add or subtract any changes in deferred income taxes. D) All of the above. ANSWER D
Date: September 19th, 2020
The shareholder receiving a stock dividend receives a share of common stock of equal value to their existing shares of common stock. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A firm purchased goods with a purchase price of $1,000 and credit terms of 1/10 net 30. The firm paid for these goods on the 5th day after the date of sale. The firm must pay ________ for the goods. A) $990 B) $900 C) $1,000 D) $1,100 ANSWER A
Date: September 19th, 2020
What is the Internal Rate of Return (IRR) for the cash flows provided in the table below? Note: The negative cash flow for year 0 is the initial investment for the project. The required rate of return is 8%. Year Cash Flow 0 -$100,000 1 $45,000 2 $45,000 3 $45,000 A) 8.00% B) 9.70% C) […]
Date: September 19th, 2020
Accruals and accounts payable are ________. A) negotiated and secured sources of long-term financing B) negotiated and unsecured sources of short-term financing C) secured sources of short-term financing D) spontaneous and unsecured sources of short-term financing ANSWER D
Date: September 19th, 2020
Which of the following is NOT a use of cash from investing activities? A) Proceeds from the sale of a business B) Investment in fixed assets C) Payment of dividends D) Both A and C ANSWER D
Date: September 19th, 2020
