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Appendix F The Sale The Old Machine Replacement Decision
ANSWER: False DIFFICULTY: Easy TOPICS: Depreciation cash flows ANSWER: True DIFFICULTY: Easy TOPICS: Depreciation cash flows ANSWER: False DIFFICULTY: Medium TOPICS: Depreciation cash flows ANSWER: c DIFFICULTY: Easy TOPICS: NPV CFIN4 Chapter 10 – Project Cash Flows and Risk APPENDIX […]
Chapter 1 Overview Managerial Finance 36 Which The Following Statements
ANSWER: True DIFFICULTY: Easy TOPICS: Financial manager ANSWER: False DIFFICULTY: Easy TOPICS: Financial manager ANSWER: True DIFFICULTY: Easy TOPICS: Proprietorship ANSWER: False DIFFICULTY: Easy TOPICS: Hostile takeover CFIN4 Chapter 1 – An Overview of Managerial Finance 1. In general, the […]
Chapter 10 If the broilers are purchased, they will
CFIN4 Chapter 10 – Project Cash Flows and Risk b. After-tax operating cash flows will increase by $10,000. c. After–tax operating cash flows will decrease by $25,000. d. After–tax operating cash flows will decrease by $10,000. e. Because depreciation is […]
Chapter 10 Modified Accelerated Cost Recovery System Macrs Its
CFIN4 Chapter 10 – Project Cash Flows and Risk 1. If an investment project would make use of land which the firm currently owns, the project should be charged with the opportunity cost of the land. a. True b. False […]
Chapter 10 What Will The Firms New Overall
CFIN4 Chapter 10 – Project Cash Flows and Risk 64. Which of the following cash flows are incremental cash flows that need to be considered when evaluating a capital project? a. Interest expenses on the financing of the project. b. […]
Chapter 11 All The Companys Potential Projects Are Equally
CFIN4 Chapter 11 – The Cost of Capital ANSWER: e RATIONALE: BPRE = R.E./% Equity = $1,000,000/0.6 = $1,666,667. Since the capital budget will be $2 million, and because all equity in the WACC beyond $1,666,667 will be external equity, […]
Chapter 11 Even if a firm obtains all of its common equity from retained
CFIN4 Chapter 11 – The Cost of Capital ANSWER: False DIFFICULTY: Easy TOPICS: Cost of equity 1. Capital refers to items on the right-hand side of a firm’s balance sheet. a. True b. False ANSWER: True DIFFICULTY: Easy TOPICS: Balance […]
Chapter 12 Because creditors can foresee, to at least some extent
CFIN4 Chapter 12 – Capital Structure ANSWER: True DIFFICULTY: Easy TOPICS: Financial flexibility 1. The optimal capital structure is that capital structure which strikes a balance between risk and return such that the firm’s stock price is maximized. a. True […]
Chapter 12 Shares Outstanding step 1calculate Interest Expense debt
CFIN4 Chapter 12 – Capital Structure ANSWER: b DIFFICULTY: Medium TOPICS: Financial risk 60. If debt financing is used, which of the following is correct? a. The percentage change in net operating income is greater than a given percentage change […]
Chapter 13 The Portion The Firms Earnings That Has
ANSWER: False DIFFICULTY: Easy TOPICS: Dividend irrelevance ANSWER: True DIFFICULTY: Easy TOPICS: IOS and dividend payout ANSWER: True DIFFICULTY: Easy TOPICS: Reverse split ANSWER: True DIFFICULTY: Easy TOPICS: Dividend irrelevance ANSWER: True DIFFICULTY: Easy TOPICS: Signaling hypothesis CFIN4 Chapter 13 […]
Chapter 14 The inventory conversion period is calculated by dividing inventory
ANSWER: False DIFFICULTY: Easy TOPICS: Accruals ANSWER: False DIFFICULTY: Easy TOPICS: International working capital management ANSWER: False DIFFICULTY: Easy TOPICS: Working capital policy ANSWER: True DIFFICULTY: Easy TOPICS: Working capital policy ANSWER: False DIFFICULTY: Easy TOPICS: Working capital policy CFIN4 […]
Chapter 15 The four major elements in a firm’s credit policy are
CFIN4 Chapter 15 – Managing Short- Term Assets ANSWER: True DIFFICULTY: Easy TOPICS: Lockbox 1. Firms hold cash balances in order to complete transactions that are necessary in business operations and as compensation to banks for providing loans and services. […]
Chapter 15 These Numbers Are Expected Values And Actual
CFIN4 Chapter 15 – Managing Short- Term Assets ANSWER: c DIFFICULTY: Easy TOPICS: Aging schedule and credit policy 75. Which of the following is not a reason for firms to own marketable securities? a. Marketable securities serve as a substitute […]
Chapter 16 Managing Short term Liabilities Financing 93 Assume That Sunshine
CFIN4 Chapter 16 – Managing Short-Term Liabilities (Financing) ANSWER: c RATIONALE: Therefore, there would be a loss of 16% − 12% = 4% in interest, and the policy would be unprofitable. DIFFICULTY: Easy TOPICS: Cost of trade credit 76. In […]
Chapter 16 Which The Following Not Common Type Short
CFIN4 Chapter 16 – Managing Short-Term Liabilities (Financing) ANSWER: True DIFFICULTY: Easy TOPICS: Trade credit 1. If a firm is offered credit terms of 2/10, net 30, it is in the firm’s financial interest to pay as early during the […]
Chapter 17 This Because Once Project Operational The Firm
CFIN4 Chapter 17 – Financial Planning and Control ANSWER: True DIFFICULTY: Easy TOPICS: Financial planning objectives 1. Errors in the sales forecast can be offset by similar errors in costs and income forecasts. Thus, as long as the errors are […]
Chapter 17 Which The Following Not Directly Associated With
CFIN4 Chapter 17 – Financial Planning and Control ANSWER: c DIFFICULTY: Medium TOPICS: Operating breakeven point 69. If a firm’s degree of total leverage (DTL) is 8.0, which of the following must be correct? a. The firm must have fixed […]
Chapter 2 If Boyd Corporation has sales of $2 million per year
CFIN4 Chapter 2 – Analysis of Financial Statements ANSWER: b DIFFICULTY: Medium TOPICS: Profit margin 62. Bubbles Soap Corporation has a quick ratio of 1.0 and a current ratio of 2.0 implying that a. the value of current assets is […]
Chapter 2 While This Action Decreases receivables Current Asset Increases
CFIN4 Chapter 2 – Analysis of Financial Statements ANSWER: False DIFFICULTY: Easy TOPICS: Sources and uses of cash 1. The income statement measures the flow of funds into (i.e. revenue) and out of (i.e. expenses) the firm over a certain […]
Chapter 3 A publicly owned corporation is simply a company whose
ANSWER: False DIFFICULTY: Easy TOPICS: Stock market transactions ANSWER: True DIFFICULTY: Easy TOPICS: Financial markets ANSWER: True DIFFICULTY: Easy TOPICS: Financial intermediaries ANSWER: False DIFFICULTY: Easy TOPICS: International financial markets CFIN4 Chapter 3 – The Financial Environment: Markets, Institutions, and […]
Chapter 4 Assume that you can invest to earn a stated annual rate of
CFIN4 Chapter 4 – Time Value of Money Inputs: I = 4; PV = 1; PV = −0.50. Output: N = −17.67 = 18 years. DIFFICULTY: Easy TOPICS: Effect of inflation 54. Gomez Electronics needs to arrange financing for its […]
Chapter 4 Financial Calculator Solution Part Inputs 40
CFIN4 Chapter 4 – Time Value of Money ANSWER: a RATIONALE: Cash flow time line: Tabular solution: $20,000 = $444.89 (PVIFA r, 60) PVIFA r, 60 = 44.9549 r = 1% Financial calculator solution: Calculate periodic rate an simple rate […]
Chapter 4 Which The Following Payments Receipts Would Probably
CFIN4 Chapter 4 – Time Value of Money ANSWER: False DIFFICULTY: Easy TOPICS: Coupon rate 1. Cash flow time lines are used primarily for decisions involving paying off debt or investing in financial securities. They cannot be used when making […]
Chapter 4 You Would Like Have All The Necessary
CFIN4 Chapter 4 – Time Value of Money END mode: Inputs: N = 43; I = 4; PV = 0; FV = 80,521.83 Output: MPT = −$731.93 DIFFICULTY: Tough TOPICS: Annuity payments ANSWER: c RATIONALE: Step 1: The retirement payments, […]
Chapter 5 During or near peaks of business activity, yield curves that
CFIN4 Chapter 5 – The Cost of Money (Interest Rates) ANSWER: True DIFFICULTY: Easy TOPICS: Yield curve 1. The nominal rate of interest is defined as the sum of the nominal risk-free rate of return and the expected inflation rate. […]
Chapter 5 Given these conditions, the nominal risk-free rate
CFIN4 Chapter 5 – The Cost of Money (Interest Rates) ANSWER: a RATIONALE: r2 = (r1 in Year 1 + r1 in Year 2)/2 10.5% = (12% + r1 in Year 2)/2 r1 in Year 2 = 9%. DIFFICULTY: Easy […]
Chapter 6 Because Interest Rates Remain Constant Nothing Happens
CFIN4 Chapter 6 – Bonds (Debt) – Characteristics and Valuation ANSWER: b DIFFICULTY: Medium TOPICS: Bond yields 62. Which of the following statements is correct? a. Other things held constant, a callable bond would have a lower required rate of […]
Chapter 6 Eurocredits are bank loans that are denominated in the currency
CFIN4 Chapter 6 – Bonds (Debt) – Characteristics and Valuation ANSWER: True DIFFICULTY: Easy TOPICS: Floating rate debt 1. Typically, debentures have higher interest rates than mortgage bonds primarily because the mortgage bonds are backed by assets while debentures are […]
Chapter 6 The Annual Coupon Rate 10percent Coupon Payable
CFIN4 Chapter 6 – Bonds (Debt) – Characteristics and Valuation ANSWER: d RATIONALE: Cash flow time line: Financial calculator solution: Inputs: N = 50; PV = −1,230.51; PMT = 60; FV = 1,000 88. Refer to Gargoyle Unlimited. What is […]
Chapter 7 From a social welfare perspective, common stock is a desirable
CFIN4 Chapter 7 – Socks (Equity) – Characteristics and Valuation ANSWER: True DIFFICULTY: Easy TOPICS: Marginal investor and price 1. American depository receipts (ADRs) are foreign stocks listed on a domestic exchange. a. True b. False ANSWER: False DIFFICULTY: Easy […]
Chapter 7 May Not Scanned Copied Duplicated Posted Publicly
CFIN4 Chapter 7 – Socks (Equity) – Characteristics and Valuation 45. Eastern Auto Parts’ last dividend was D0 = $0.50, and the company expects to experience no growth for the next 2 years. However, Eastern will grow at an annual […]
Chapter 8 Cfin4 Risk And Rates Return1 Develop
CFIN4 Chapter 8 – Risk and Rates of Return 1. If we develop a weighted average of the possible return outcomes, multiplying each outcome or “state” by its respective probability of occurrence for a particular stock, we can construct a […]
Chapter 8 Risk And Rates Return 59 Assume That New
CFIN4 Chapter 8 – Risk and Rates of Return 46. Assume the risk-free rate of return (rRF) is 5 percent, the market risk premium (RPM ) is 8 percent, and an investment exists that has a beta (β) equal to […]
Chapter 9 Both are consistent with MIRR less than WACC
CFIN4 Chapter 9 – Capital Budgeting Techniques c. 13.00% d. 13.36% e. 13.59% ANSWER: c RATIONALE: Financial calculator solution: Calculate amount of annual cash flow Inputs: N = 7; I = 14; PV = −30,000. Output: PMT = $6,995.77. Calculate […]
Chapter 9 Projects DOG and QUE, because their IRRs are greater than
CFIN4 Chapter 9 – Capital Budgeting Techniques ANSWER: c DIFFICULTY: Tough TOPICS: Ranking conflicts 58. A college intern working at Anderson Paints evaluated potential investments that is, capital budgeting projects using the firm’s average required rate of return (WACC), and […]
Chapter 9 The rule itself should not be affected by managers’ tastes, the choice of accounting
CFIN4 Chapter 9 – Capital Budgeting Techniques ANSWER: False DIFFICULTY: Easy TOPICS: Modified IRR 1. Beyond some point, a further increase in the size of the firm’s total capital budget may lead to a decrease in the NPVs of all […]