1/15 net 30 date of invoice translates as ________. A) a 1 percent cash discount may be taken if paid in 15 days; if no cash discount is taken, the balance is due in 30 days after the middle of the month B) a 1 percent cash discount may be taken if paid in 15 […]
Date: September 19th, 2020
Which of the following is typically considered to be the most appropriate proxy for the risk-free rate when applying the CAPM? A) 10-year Treasury bonds B) 10-year AAA bonds C) the prime rate D) the firm’s current yield to maturity on outstanding debt ANSWER A
Date: September 19th, 2020
Which of the following statement i s NOT accurate? Financial statements serve a number of purposes: A) from a lender’s perspective they often form the basis for covenant restrictions. B) financial ratios are useful for planning and budgeting purposes C) financial ratios are only useful when using book values because market values change almost continuously […]
Date: September 19th, 2020
Your firm is considering a new investment. The initial cost (today) is $25,000. The project generates year-end annuity cash flows of $15,000 per year for the next two years. If the hurdle rate for the project is 12% and the reinvestment rate is 9%, calculate the MIRR. Is this an acceptable project? A) 8.00%; no, […]
Date: September 19th, 2020
3/10 net 45 EOM translates as ________. A) a 10 percent cash discount may be taken if paid in three days; if no cash discount is taken, the balance is due in 45 days B) a 3 percent cash discount may be taken if paid in 10 days; if no cash discount is taken, the […]
Date: September 19th, 2020
The two major sources of short-term financing are ________. A) a line of credit and notes payable B) accounts payable and accruals C) a line of credit and term loans D) accounts receivable and notes payable ANSWER B
Date: September 19th, 2020
If a firm’s earnings remain constant and total cash dividends do not increase, a stock dividend results in a lower per-share market value for the firm’s stock. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
You have been provided financial statements for Bacon Signs. With this information you are able to calculate a number of financial ratios. However, financial ratios, while often very useful, alone are insufficient for a thorough financial analysis. Identify at least 5 types of useful financial information you would like to use in conjunction with the […]
Date: September 19th, 2020
Which of the following is NOT a source of cash from financing activities? A) Repayment of long-term debt B) Proceeds from issuance of common stock C) Proceeds for long-term borrowing D) Both A and C ANSWER A
Date: September 19th, 2020
Which of the following is likely to be a part of the firm’s annual report? A) The 10-K report B) A letter from senior management to the shareholders C) Footnotes to the financial statements D) All of the above ANSWER D
Date: September 19th, 2020
