You will find the exam in the attachment file.You will find the exam in the attachment file.You will find the exam in the attachment file.You will find the exam in the attachment file.You will find the exam in the attachment file.You will find the exam in the attachment file.You will find the exam in the attachment file.You will find the exam in the attachment file.You will find the exam in the attachment file.You will find the exam in the attachment file.
Unformatted Attachment Preview
Equipment cost: $200,000
Project Life: 5 years
Salvage Value: 0
Depreciation Method: Straight-line 5 years
Cash operating expenses: 5,000 per year
Revenues: 360,000 per year
Growth Rate for revenues: 0% per year
Cost of goods sold/revenue: 60%
Investment in net operating working capital (year 0): 78,000
Required rate of return 20%
Tax Rate 30%
1. What is the Net Present Value of the above investment?
annual cost of deficits
net operating income
book value of equipment
salvage value (today)
Salvage value (year 5)
remaining project life
net operating working capital
2. If the discount rate is 15% should you buy the new equipment or keep the old equipment?
$100 today is worth the same as $100 in the future (True or False)?
4. To compare cash flows at different time periods we must take the ______________________ of
future cash flows.
5. The bank pays 5.60%, compounded daily (based on 360 days), on a 9-month
certificate of deposit. If you deposit $20,000 you would expect to earn
around __________ in interest.
6. Newborn baby Gregory, born today, has doting grandparents who want to
start saving for his college education. They calculate that he will need
$25,000 per year for 4 years beginning at age 18. In addition, they’d like to
give him a lump sum of $50,000 at age 22 so he can buy a car for his
graduation. They want to make 18 equal annual payments into a 10%
interest-paying account (starting today and ending on Gregory’s
17th birthday) that will just cover these plans. How much will they need to
invest each year?
7. What is the market value of a $1,000 face-value bond with a 10 percent
coupon rate when the market’s rate of return is 9 percent?
8. The market value of a firm is equal to the common stock equity account on
its balance sheet. (true or false)
9. You are considering the purchase of a $1,000 par value bond of AuContraire,
Inc. The bond is currently selling for $905 and (very atypically) pays $20
quarterly. It matures in 20 years.
What is the coupon rate of this bond?
What is the current yield?
Why is the current yield higher than the stated coupon rate?
10.The firm of Sun and Moon purchased a share of Acme.com common stock
exactly one year ago for $45. During the past year the common stock paid
an annual dividend of $2.40. The firm sold the security today for $85. What
is the rate of return the firm has earned?
11. The return on common stocks is a combination of income paid to the
stockholder plus any appreciation in stock price. (true or false)
12. You have invested in a ski resort that has the following distribution of
returns under different snow conditions:
RATE OF RETURN
What is the expected value of return on your investment?
13. What is the most appropriate goal of the firm?
a. Shareholder value maximization
b. Profit maximization
c. Stakeholder maximization
d. EPS maximization
14. The greater the ownership percentage of managers, then the more likely the
managers will behave in a shareholder wealth maximizing behavior. (true or
According to the accounting profession, which of the following would be
considered a cash-flow item from a “financing” activity?
a. A cash outflow to the government for taxes
b. A cash outflow to repurchase the firms own common stock
c. A cash outflow to lenders as interest
d. A cash outflow to purchase bonds issued by another company
16. Which of the following would not improve the current ratio:
a. Borrow short term to finance additional fixed assets
b. Issue long-term debt to buy inventory
c. Sell common stock to reduce current liabilities
d. Sell fixed assets to reduce accounts payable
17. The current ratio is never bigger than the quick ratio (True or False)?
18. You have the following information on Brunger Beninese Batik Corp.:
Gross profit margin
Given these figures, calculate the firm’s net sales.
19. If you want a form of reducing the book value of equipment faster than straight-line
depreciation you can use _____________________________________.
20. When managers pursue their own interests instead of what owners want them to do we have a
Purchase answer to see full
Why Work with Us
Top Quality and Well-Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
Professional and Experienced Academic Writers
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
Free Unlimited Revisions
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.
Prompt Delivery and 100% Money-Back-Guarantee
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
Admission Essays & Business Writing Help
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.