Financial Management: Theory & Practice 15th Edition

MINI CASE Assume that you recently graduated and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firms clients is Michelle Dellatorre, a professional tennis player who has just come to the United States from Chile. Dellatorre is a

Chapter 10 The Basics of Capital Budgeting: Evaluating Cash Flows ANSWERS TO END-OF-CHAPTER QUESTIONS 10-1 a. Capital budgeting is the whole process of analyzing projects and deciding whether they should be included in the capital budget. This process is of fundamental importance to the success or failure of the firm as the fixed asset investment

10-12 a. Purchase price $ 900,000 Installation 165,000Initial outlay $1,065,000 Installation 165,000Initial outlay $1,065,000 Installation 165,000 Initial outlay $1,065,000 CF0 = -1065000; CF1-5 = 350000; I/YR = 14; NPV = ? NPV = $136,578; IRR = 19.22%.b. Ignoring environmental concerns, the project should be undertaken because its NPVis positive and its IRR is greater than

10-19 a. The projects expected cash flows are as follows (in millions of dollars): Time Net Cash Flow 0 ($ 4.4)1 27.72 (25.0) 0 ($ 4.4)1 27.72 (25.0) 0 ($ 4.4) 1 27.7 2 (25.0) We can construct the following NPV profile: Discount Rate NPV 0% ($1,700,000) 9 (29,156) 10 120,661 50 2,955,556100 3,200,000200 2,055,556300 962,500400 140,000410 70,204420 2,367430 (63,581) 50 2,955,556100

c. 3. Would the NPVs change if the cost of capital changed? Answer: The NPV of a project is dependent on the cost of capital used. Thus, if the cost of capital changed, the NPV of each franchise would change. NPV declines as rincreases, and NPV rises as r decreases. capital changed,

j. As a separate project (Project P), you are considering sponsoring a pavilion at the upcoming Worlds Fair. The pavilion would cost $800,000, and it is expected to result in $5 million of incremental cash inflows during its 1 year of operation. However, it would then take another year, and $5 million of

Chapter 11 Cash Flow Estimation and Risk Analysis ANSWERS TO END-OF-CHAPTER QUESTIONS 11-1 a. Project cash flow, which is the relevant cash flow for project analysis, represents the actual flow of cash, which includes investments in capital and working capital, but does not include interest expenses or noncash charges like depreciation (except to

11-8 a. Sales = 1,000($138) $138,000 Cost = 1,000($105) 105,000Net before tax $ 33,000Taxes (34%) 11,220Net after tax $ 21,780 Cost = 1,000($105) 105,000Net before tax $ 33,000Taxes (34%) 11,220Net after tax $ 21,780 Cost = 1,000($105) 105,000 Net before tax $ 33,000 Taxes (34%) 11,220 Net after tax $ 21,780 Not considering inflation, NPV is -$4,800.

11-14 a. Cost of new machine ($775,000) Salvage value, old 135,000Savings due to loss on sale ($450,000 $135,000) 0.35 110 ,250Cash outlay for new machine ($ 529 ,750) Salvage value, old 135,000Savings due to loss on sale ($450,000 $135,000) 0.35 110 ,250Cash outlay for new machine ($ 529 ,750) Salvage value, old 135,000 Savings

b. Disregard the assumptions in part a. What is Shrieves depreciable basis? What are the annual depreciation expenses? Answer: The assets depreciable basis includes shipping and installation costs. Thus, the assets depreciable basis = $200,000 + $10,000 + $30,000 = $240,000. Get the depreciationrates from Table 13A-2 in the book. Note that

Chapter 12 Corporate Valuation and Financial Planning ANSWERS TO END-OF-CHAPTER QUESTIONS 12-1 a. The operating plan provides detailed implementation guidance designed to accomplish corporate objectives. It details who is responsible for what particularfunction, and when specific tasks are to be accomplished. The financial plan detailsthe financial aspects of the corporations operating plan. accomplish corporate

12-9 Garlington Technologies Inc. Pro Forma Income Statement December 31, 2017 Forecast Pro Forma 2016 Basis 2017 Sales $3,600,000 1.10 Sales16 $3,960,000 Operating costs 3,279,720 0.911 Sales17 3,607,692 EBIT $ 320,280 $ 352,308 Interest 18,280 0.13 Debt16 20,280EBT $ 302,000 $ 332,028Taxes (40%) 120,800 132,811Net income $ 181,200 $ 199,217Dividends: $ 108,000 Set by management

e. Use the following assumptions to answer the questions below: (1) Operating ratios remain unchanged. (2) Sales will grow by 10%, 8%, 5%, and 5% for the next four years. (3) The target weighted average cost of capital (WACC) is 9%. This is the No Change scenario because operations remain unchanged. Actual Forecast Inputs 2016

Chapter 13 Corporate Governance ANSWERS TO END-OF-CHAPTER QUESTIONS 13-1 a. An agency relationship arises whenever one or more individuals, the principals, hire another individual, the agent, to perform some service and then delegatedecision-making authority to that agent. Primary agency relationships exist between(1) stockholders and managers, and (2) between debtholders and stockholders. another individual, the agent,

Chapter 14 Distributions to Shareholders: Dividends and Repurchases ANSWERS TO END-OF-CHAPTER QUESTIONS 14-1 a. The optimal distribution policy is one that strikes a balance between dividend yield and capital gains so that the firms stock price is maximized. b. The dividend irrelevance theory holds that dividend policy has no effect on either the price of a firms

Answers and Solutions: 14 - 1 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. a. 3. What do the three theories indicate regarding the actions management should take with respect to dividend payout? Answer: If

Chapter 15 Capital Structure Decisions ANSWERS TO END-OF-CHAPTER QUESTIONS 15-1 a. Capital structure is the manner in which a firms assets are financed; that is, the right-hand side of the balance sheet. Capital structure is normally expressed as the percentage of each type of capital used by the firm--debt, preferred stock, and common equity. Business

MINI CASE Assume you have just been hired as a business manager of PizzaPalace, a regional pizza restaurant chain. The companys EBIT was $50 million last year and is not expected to grow. The firm is currently financed with all equity and it has 10 million shares outstanding. When you took

i. Describe the recapitalization process and apply it to PizzaPalace. Calculate the resulting the value of the debt that will be issued, the resulting market value of equity, the price per share, the number of shares repurchased, and the remaining shares. Considering only the capital structures under analysis, what is PizzaPalaces optimal capital structure? Answer: First,

Chapter 16 Supply Chains and Working Capital Management ANSWERS TO END-OF-CHAPTER QUESTIONS 16-1 a. Working capital is a firms investment in short-term assetscash, marketable securities, inventory, and accounts receivable. Net working capital is current assetsminus current liabilities. Net operating working capital is operating current assetsminus operating current liabilities. securities, inventory, and accounts receivable. Net working

16-13 a. Current year sales are expected to be $1,600,000x(1.25) = $2,000,000. Return on equity may be computed as follows: Restricted Moderate Relaxed Current assets (% of sales Sales) $ 900,000 $1,000,000 $1,200,000 Fixed assets 1,000,000 1,000,000 1,000,000 Total assets $1,900,000 $2,000,000 $2,200,000 Debt (60% of assets) $1,140,000 $1,200,000 $1,320,000 Equity 760,000 800,000 880,000Total liability and

d. Is there any reason to think that RR may be holding too much inventory? Answer: As pointed out in part a, RRs inventory turnover (10.8) is considerably lower than the average firms turnover (20.00). This indicates that the firm is carrying excessiveinventory per dollar of sales. the average firms turnover (20.00).

Chapter 17 Multinational Financial Management ANSWERS TO END-OF-CHAPTER QUESTIONS 17-1 a. A multinational corporation is one that operates in two or more countries. b. The exchange rate specifies the number of units of a given currency that can be purchased for one unit of another currency. The fixed exchange rate system was in effect from the

MINI CASE With the growth in demand for exotic foods, Possum Products' CEO Michael Munger is considering expanding the geographic footprint of its line of dried and smoked low-fat opossum, ostrich, and venison jerky snack packs. Historically, jerky products have performed well in the southern United States, but there are indications

e. What is a convertible currency? What problems arise when a multinational company operates in a country whose currency is not convertible? Answer: A currency is convertible when it is traded on the world currency exchanges and when the issuing country stands ready to redeem the currency at market rates. When a countrys

Chapter 19 Lease Financing ANSWERS TO END-OF-CHAPTER QUESTIONS 19-1 a. The lessee is the party leasing the property. The party receiving the payments from the lease (that is, the owner of the property) is the lessor. b. An operating lease, sometimes called a service lease, provides for both financing and maintenance. Generally, the operating lease contract

MINI CASE Lewis Securities Inc. has decided to acquire a new market data and quotation system for its Richmond home office. The system receives current market prices and other information from several on-line data services, then either displays the information on a screen or stores it for later retrieval by the firms brokers. The

MINI CASE Jenny Cochran, a graduate of The University of Tennessee with 4 years of experience as an equities analyst, was recently brought in as assistant to the chairman of the board of Computron Industries, a manufacturer of computer components. During the previous year, Computron had doubled its plant capacity, opened new sales offices outside

20-7 a. Stock data and stock required return: rd = 9%. P0 = $23. Dividend yield = 7%.g = 6%.rs = Dividend yield + g = 7% + 6% = 13%. P0 = $23. Dividend yield = 7%.g = 6%.rs = Dividend yield + g = 7% + 6% = 13%.

c. Mr. Duncan has decided to eliminate preferred stock as one of the alternatives and focus on the others. EduSofts investment banker estimates that EduSoft could issue a bond-with-warrants package consisting of a 20-year bond and 27 warrants. Each warrant would have a strike price of $25 and 10 years until expiration. It is

Chapter 21 Dynamic Capital Structures and Corporate Valuation ANSWERS TO END-OF-CHAPTER QUESTIONS 21-1 a. An interest tax shield is the amount of cash flow that is sheltered from taxation due to the tax deductibility of interest. It is equal to rd(D)(T). The value of the tax shield is the present value of the future

MINI CASE David Lyons, CEO of Lyons Solar Technologies, is concerned about his firms level of debt financing. The company uses short-term debt to finance its temporary working capital needs, but it does not use any permanent (long-term) debt. Other solar technology companies average about 30 percent debt, and Mr. Lyons wonders why they

22-6 a. BCCs unlevered cost of equity depends on its pre-merger cost of equity and its pre-merger capital structure: rsL = rRF + (RPM)b = 6% + (4%)1.40 = 11.6%. rsU = wdrd + wsrsL = 0.40(10%) + 0.60(11.6%) = 10.96% rsL = rRF + (RPM)b = 6% + (4%)1.40 =

e. Conceptually, what is the appropriate discount rate to apply to the cash flows developed in part c? What is your actual estimate of this discount rate? Answer: As discussed above, the free cash flows, tax shields and horizon value should all be discounted at the unlevered cost of equity. This cost should

Chapter 23 Enterprise Risk Management ANSWERS TO END-OF-CHAPTER QUESTIONS 23-1 a. A derivative is an indirect claim security that derives its value, in whole or in part, by the market price (or interest rate) of some other security (or market). Derivativesinclude options, interest rate futures, exchange rate futures, commodity futures, andswaps. the market price (or

MINI CASE Assume that you have just been hired as a financial analyst by Tennessee Sunshine Inc., a mid-sized Tennessee company that specializes in creating exotic sauces from imported fruits and vegetables. The firm's CEO, Bill Stooksbury, recently returned from an industry corporate executive conference in San Francisco, and one of the sessions he

Chapter 25 Portfolio Theory and Asset Pricing Models ANSWERS TO END-OF-CHAPTER QUESTIONS 25-1 a. A portfolio is made up of a group of individual assets held in combination. An asset that would be relatively risky if held in isolation may have little, or even no risk ifheld in a well-diversified portfolio. that would be relatively

MINI CASE You have been hired at the investment firm of Bowers & Noon. One of its clients doesnt understand the value of diversification or why stocks with the biggest standard deviations dont always have the highest expected returns. Your assignment is to address the clients concerns by showing the client how to answer

Chapter 26 Real Options ANSWERS TO END-OF-CHAPTER QUESTIONS 26-1 a. Real options occur when managers can influence the size and risk of a projects cash flows by taking different actions during the projects life. They are referred to as real options because they deal with real as opposed to financial assets. They are alsocalled managerial

26-8 P = PV as of time zero of all expected future cash flows if the project is repeated starting in year 2. Note it includes both the good cash flows and the bad cash flows since as of now, we dont know which outcome will result, and P excludes the $20,000

g. Now suppose the cost of the project is $75 million and the project cannot be delayed. But if Tropical Sweets implements the project, then Tropical Sweets will have a growth option. It will have the opportunity to replicate the original project at the end of its life. What is the total expected

Chapter 27 Providing and Obtaining Credit ANSWERS TO END-OF-CHAPTER QUESTIONS 27-1 a. Cash discounts are often used to encourage early payment and to attract customers by effectively lowering prices. Credit terms are usually stated in the following form: 2/10, net 30. This means a 2 percent discount will apply if the account is

27-9 a. Malones current accounts payable balance represents 60 days purchases. Daily purchases can be calculated as 60 500$ = $8.33. If Malone takes discounts then the accounts payable balance would include only 10 days purchases, so the A/P balance would be $8.33 10 = $83.33. If Malone doesnt take discounts but pays in 30

b. 5. If bank loans have a cost of 12 percent, what is the annual dollar cost of carrying the receivables? Answer: Cost of carrying receivables = 0.12($136,849) = $16,422. In addition, there is an opportunity cost associated with not having the use of the profit component of thereceivables. Answer: Cost of carrying

m. What is the firm's current dollar cost of carrying receivables? What would it be after the proposed change? Answer: Current situation: the firm's average daily sales currently amount to $1,000,000/365 = $2,739.73. The DSO is 32 days, so accounts receivable amount to 32($2,739.73) = $87,671. However, only 75 percent of this total

Chapter 28 Advanced Issues in Cash Management and Inventory Control ANSWERS TO END-OF-CHAPTER QUESTIONS 28-1 a. The Baumol model is a model for establishing the firm's target cash balance that closely resembles the EOQ model used for inventory. The model assumes (1) that the firm uses cash at a steady, predictable rate, (2) that the firm's

MINI CASE Andria Mullins, financial manager of Webster Electronics, has been asked by the firm's CEO, Fred Weygandt, to evaluate the company's inventory control techniques and to lead a discussion of the subject with the senior executives. Andria plans to use as an example one of Webster's "big ticket" items, a customized computer microchip

Chapter 29 Pension Plan Management ANSWERS TO END-OF-CHAPTER QUESTIONS 29-1 a. Under a defined benefit plan, the employer agrees to give retirees a specifically defined benefits package. The payments could be set in final form as of theretirement date, or they could be indexed to increase with the cost of living. defined benefits package. The

29-3 a. Find the present value (today's value) of the firm's obligations. To simplify calculations, find the value of each 5-year period's payment as of the beginning of the period. For example, the value at Time 10 of the payments for Years 11-15 is: 10 11 12 13 14 15 | |

Chapter 3 Analysis of Financial Statements ANSWERS TO END-OF-CHAPTER QUESTIONS 3-1 a. A liquidity ratio is a ratio that shows the relationship of a firms cash and other current assets to its current liabilities. The current ratio is found by dividing current assets by current liabilities. It indicates the extent to which current liabilities arecovered

SOLUTION TO SPREADSHEET PROBLEM 3-15 The detailed solution for the problem is available is in the file Ch03 P15 Build a Model Solution.xlsx and is available at the textbooks web site. Answers and Solutions: 3 - 1 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated,

f. Calculate the 2017 price/earnings ratio, price/cash flow ratios, and market/book ratio. Do these ratios indicate that investors are expected to have a high or low opinion of the company? Answer: EPS = Net Income/Shares Outstanding = $253,584/250,000 = $1.0143. Answer: EPS = Net Income/Shares Outstanding = $253,584/250,000 = $1.0143. Answer: EPS =

Chapter 30 Financial Management in Not-for-Profit Businesses ANSWERS TO END-OF-CHAPTER QUESTIONS 30-1 The major difference in ownership structure is that investor-owned firms have well-defined owners, who own stock in the business and exercise control over the firm through the proxy mechanism. Conversely, not-for-profit firms do not have stockholders.Control rests in a board of trustees comprised

Chapter 4 Time Value of Money ANSWERS TO END-OF-CHAPTER QUESTIONS 4-1 a. PV (present value) is the value today of a future payment, or stream of payments, discounted at the appropriate rate of interest. PV is also the beginning amount that will grow to some future value. The parameter i is the periodic interest rate

4-14 a. Cash Stream A Cash Stream B 0 1 2 3 4 5 0 1 2 3 4 5 | | | | | | | | | | | | PV = ? 100 400 400 400 300 PV = ? 300 400 400 400 100 With a financial

SOLUTION TO SPREADSHEET PROBLEM 4-35 The detailed solution for the spreadsheet problem, Ch04 P35 Build a Model Solution.xlsx, is available on the textbooks Web site. Answers and Solutions: 4 -1 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website,

h. 1. Define (a) the stated, or quoted, or nominal rate, (iNom), and (b) the periodic rate (iPer). ANSWER: The quoted, or nominal, rate is merely the quoted percentage rate of return. The periodic rate is the rate charged by a lender or paid by a borrower each period(periodic rate = INOM/M).

Chapter 5 Bonds, Bond Valuation, and Interest Rates ANSWERS TO END-OF-CHAPTER QUESTIONS 5-1 a. A bond is a promissory note issued by a business or a governmental unit. Treasury bonds, sometimes referred to as government bonds, are issued by the Federal government and are not exposed to default risk. Corporate bonds are issued by corporations and

5-17 t Price of Bond C Price of Bond Z 0 $1,012.79 $ 693.04 1 1,010.02 759.57 2 1,006.98 832.493 1,003.65 912.414 1,000.00 1,000.00 2 1,006.98 832.493 1,003.65 912.414 1,000.00 1,000.00 2 1,006.98 832.49 3 1,003.65 912.41 4 1,000.00 1,000.00 5-18 r = r* + IP + MRP + DRP + LP. r* = 0.02. IP = [0.03 +

e. 1. What would be the value of the bond described in part d if, just after it had been issued, the expected inflation rate rose by 3 percentage points, causing investors to require a 13 percent return? Would we now have a discount or a premium bond? Answer: With a financial calculator, just

j. Define the real risk-free rate (r*). What security can be used as an estimate of r*? What is the nominal risk-free rate (rRF)? What securities can be used as estimates of rRF? Answer: The real risk-free rate, r*, is the rate that a hypothetical riskless security pays each moment if zero inflation

Chapter 6 Risk and Return ANSWERS TO END-OF-CHAPTER QUESTIONS 6-1 a. Stand-alone risk is only a part of total risk and pertains to the risk an investor takes by holding only one asset. Risk is the chance that some unfavorable event will occur. For instance, the risk of an asset is essentially the chance that

6-10 Portfolio beta = $4,000,000 $400,000 (1.50) + $4,000,000 $600,000 (-0.50) + $4,000,000 $1,000,000 (1.25) + $4,000,000 $2,000,000 (0.75) = 0.1)(1.5) + (0.15)(-0.50) + (0.25)(1.25) + (0.5)(0.75) = 0.15 - 0.075 + 0.3125 + 0.375 = 0.7625.rp= rRF + (rM - rRF)(bp) = 6% + (14% - 6%)(0.7625) = 12.1%. = 0.1)(1.5) + (0.15)(-0.50) + (0.25)(1.25) +

e. Your client has decided that the risk of the bond portfolio is acceptable and wishes to leave it as it is. Now your client has asked you to use historical returns to estimate the standard deviation of Blandys stock returns. (Note: Many analysts use 4 to 5 years of monthly returns to

n. 1. Suppose the risk-free rate goes up to 7%. What effect would higher interest rates have on the SML and on the returns required on high-risk and low-risk securities? Answer: The SML is shifted higher, but the slope is unchanged. Here we have plotted the SML for betas ranging

Chapter 7 Corporate Valuation and Stock Valuation ANSWERS TO END-OF-CHAPTER QUESTIONS 7-1 a. A proxy is a document giving one person the authority to act for another, typically the power to vote shares of common stock. If earnings are poor and stockholders are dissatisfied, an outside group may solicit the proxies in an effort to

7-17 a. HV2 = = $2,700,000. 7-17 a. HV2 = = $2,700,000. 7-17 a. HV2 = = $2,700,000. 08.012.0 000,108$ b. 0 1 2 3 N | | | | |7-18 a. HV3 = 07.013.0)07.1( 40$ = $713.33.b. 0 1 2 3 4 N | | | | | |WACC = 12% g

d. 1. Suppose the free cash flow at Time 1 is expected to grow at a constant rate of gL forever. If gL < WACC, what is a formula for the present value of expected free cash flows when discounted at the WACC? Answer: d. 2. If the most recent free cash flow

n. 1. Write out a formula that can be used to value any dividend-paying stock, regardless of its dividend pattern Answer: The value of any stock is the present value of its expected dividend stream: 0P = .)r1(D)r1(D)r1(D)r1(Ds3s3s2ts1However, some stocks have dividend growth patterns which allow them to be valuedusing short-cut formulas. 0P

Chapter 8 Financial Options and Applications in Corporate Finance ANSWERS TO END-OF-CHAPTER QUESTIONS 8-1 a. An option is a contract which gives its holder the right to buy or sell an asset at some predetermined price within a specified period of time. A call option allows the holderto buy the asset, while a

d. 2. Suppose you write 1 call option and buy Ns shares of stock. How many shares must you buy to create a portfolio with a riskless payoff (which is called a hedge portfolio)? What is the payoff of the portfolio? Answer: Ns = Cu - Cd= 0.69153 P(u - d) Ns = Cu -

Chapter 9 The Cost of Capital ANSWERS TO END-OF-CHAPTER QUESTIONS 9-1 a. The weighted average cost of capital, WACC, is the weighted average of the after-tax component costs of capital-debt, preferred stock, and common equity. Each weighting factor is the proportion of that type of capital in the optimal, or target, capital structure. The after-tax cost

MINI CASE During the last few years, Jana Industries has been too constrained by the high cost of capital to make many capital investments. Recently, though, capital costs have been declining, and the company has decided to look seriously at a major expansion program that has been proposed by the marketing department. Assume that

Ch 08 Financial Options and Applications in Corporate Finance Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. An option is a contract that gives its holder the right to buy or

Ch 12 Financial Planning and Applications to Corporate Valuation Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Operating plans sketch out broad approaches for realization of the firm's strategic vision. These

Ch 12 Financial Planning and Applications to Corporate Valuation Cengage Learning Testing, Powered by Cognero Page 17 Cengage Learning Testing, Powered by Cognero Page 17 Cengage Learning Testing, Powered by Cognero Page 17 terms held equal). d. The company discovers that it has excess capacity in its

Ch 01 An Overview of Financial Management and the Financial Environment Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. The form of organization for a business is not an important issue,

Ch 01 An Overview of Financial Management and the Financial Environment Cengage Learning Testing, Powered by Cognero Page 15 Cengage Learning Testing, Powered by Cognero Page 15 Cengage Learning Testing, Powered by Cognero Page 15 DATE CREATED: 8/26/2015 10:43 AM DATE MODIFIED: 8/26/2015 10:43 AM QUESTION ID: JFND-GO4G-EO5U-EPT1

Ch 10 The Basics of Capital Budgeting: Evaluating Cash Flows Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 dollar that will not be received until sometime in the future. d. One

Ch 10 The Basics of Capital Budgeting: Evaluating Cash Flows Cengage Learning Testing, Powered by Cognero Page 61 Cengage Learning Testing, Powered by Cognero Page 61 Cengage Learning Testing, Powered by Cognero Page 61 a. A project's MIRR is always less than its regular IRR. b.

Ch 10 The Basics of Capital Budgeting: Evaluating Cash Flows Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. A firm should never accept a project if its acceptance would lead to

Ch 10 The Basics of Capital Budgeting: Evaluating Cash Flows Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 ANSWER: c RATIONALE: Statement c is true; the other statements are false. POINTS: 1

Ch 11 Cash Flow Estimation and Risk Analysis Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Because of improvements in forecasting techniques, estimating the cash flows associated with a project has

Ch 11 Cash Flow Estimation and Risk Analysis Cengage Learning Testing, Powered by Cognero Page 52 Cengage Learning Testing, Powered by Cognero Page 52 Cengage Learning Testing, Powered by Cognero Page 52 67. Laramie Labs uses a risk-adjustment when evaluating projects of different risk. Its overall (composite)

Ch 11 Cash Flow Estimation and Risk Analysis Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 QUESTION ID: JFND-GO4G-EO4D-OCTU QUESTION GLOBAL ID: GCID-E7BW-1TBP-CTOU-GAMN-8R3U-YPB3-GE31-4QBU-GBTN-4C5G-CE4N-4CTI-8Y41-4CDD-GJOU-QQJT-GTDI-GWN8-EPRW-EMMB-GIUD-CPBI-GC4S-K3JI-CWSU-1A3O-8RSS-GCDN-GOSS-KAUB-CWSS-RCTI-CJ1D-RPJU-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE QUESTION ID: JFND-GO4G-EO4D-OCTU QUESTION GLOBAL ID: GCID-E7BW-1TBP-CTOU-GAMN-8R3U-YPB3-GE31-4QBU-GBTN-4C5G-CE4N-4CTI-8Y41-4CDD-GJOU-QQJT-GTDI-GWN8-EPRW-EMMB-GIUD-CPBI-GC4S-K3JI-CWSU-1A3O-8RSS-GCDN-GOSS-KAUB-CWSS-RCTI-CJ1D-RPJU-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE QUESTION ID:

Ch 11 Cash Flow Estimation and Risk Analysis OTHER: TYPE: Multiple Choice: Problem DATE CREATED: 8/26/2015 10:46 AM DATE MODIFIED: 8/28/2015 12:56 PM QUESTION ID: JFND-GO4G-EO4D-OCNN QUESTION GLOBAL ID: GCID-E7BW-1TBP-CTOU-GAMN-8R3U-YPB3-GE31-4QBU-GBTN-4C5G-CE4N-4CTI-8Y41-4CDD-GJOU-QQJT-GTDI-GWN8-EPRW-EMMN-GTOU-CAJA-GIUD-NPMG-COSU-1C3W-8YSU-R3DB-GOSS-EPTA-CWSS-CCDB-8BUD-ECJZ-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE OTHER: TYPE: Multiple Choice: Problem DATE CREATED: 8/26/2015 10:46 AM DATE MODIFIED: 8/28/2015 12:56 PM QUESTION ID: JFND-GO4G-EO4D-OCNN

Ch 13 Corporate Governance Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Two important issues in corporate governance are (1) the rules that cover the board's ability to fire the CEO

Ch 14 Distributions to Shareholders: Dividends and Repurchases Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 DATE MODIFIED: 8/26/2015 10:46 AM QUESTION ID: JFND-GO4G-EO4D-1OKB QUESTION GLOBAL ID: GCID-E7BW-1TBP-GR4U-QPBO-G71U-RP5N-CEAN-4PTA-CWHN-4CJO-GC4N-4PJS-GA51-4PT3-8Y5S-GAUR-GJDI-GWN8-EPRW-EMMG-CCAD-NA5G-GC3G-CA5F-GHSU-YP3A-8YSS-K3JA-GOSU-OCUG-GESU-EP3I-GT1S-C3B3-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE DATE MODIFIED: 8/26/2015 10:46

Ch 14 Distributions to Shareholders: Dividends and Repurchases Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Which of the following statements is correct? a. One advantage of dividend reinvestment plans

Ch 15 Capital Structure Decisions Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 KEYWORDS: Blooms: Analysis OTHER: TYPE: Multiple Choice: Problem DATE CREATED: 8/26/2015 10:46 AM DATE MODIFIED: 8/26/2015 10:46 AM QUESTION

Ch 15 Capital Structure Decisions Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Different borrowers have different risks of bankruptcy, and bankruptcy is costly to lenders. Therefore, lenders charge higher rates

Ch 15 Capital Structure Decisions LOCAL STANDARDS: United States - OH - Default City - TBA TOPICS: Leverage and capital structure KEYWORDS: Blooms: Comprehension OTHER: TYPE: Multiple Choice: Conceptual DATE CREATED: 8/26/2015 10:46 AM DATE MODIFIED: 8/26/2015 10:46 AM QUESTION ID: JFND-GO4G-EO4D-1QKD QUESTION GLOBAL ID: GCID-E7BW-1TBP-CEHD-QQBA-GFTD-GP5N-CA51-4CJT-8FO1-43UN-GO4N-4AJ3-GPT1-4QBT-GW4G-G3MF-GTDI-GWN8-EPRW-EMJS-GPTU-RCMF-GR3G-N3UN-COSU-G3BU-CESU-OPBZ-GOSU-1C3A-8RSU-CPDF-CE4S-CA3U-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE LOCAL STANDARDS:

Ch 15 Capital Structure Decisions Cengage Learning Testing, Powered by Cognero Page 53 Cengage Learning Testing, Powered by Cognero Page 53 Cengage Learning Testing, Powered by Cognero Page 53 c. 6,500; $51.06 d. 6,649; $53.33 e. 6,959; $58.78 ANSWER: c RATIONALE: First, find the stock

Ch 17 Multinational Financial Management Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Multinational financial management requires that financial analysts consider the effects of changing currency values. a. True

Ch 17 Multinational Financial Management management LOCAL STANDARDS: United States - OH - Default City - TBA TOPICS: Political risk KEYWORDS: Blooms: Knowledge DATE CREATED: 8/26/2015 10:47 AM DATE MODIFIED: 8/26/2015 10:47 AM QUESTION ID: JFND-GO4G-EO4R-NQNB QUESTION GLOBAL ID: GCID-E7BW-1TBP-GOAU-QCBW-GB1D-CCB3-CW41-4AJZ-CWH1-4PJA-GC4N-4C5F-GIO1-4C5R-CFTG-GAJS-CTDI-GWN8-EPRW-EMMN-C3OU-NPMF-GPUG-NP3S-CCSS-GQDF-CRSS-EAJ1-GOSS-NCMR-GWSU-RCJ1-CA4U-GQMB-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE management LOCAL STANDARDS: United States - OH -

Ch 18 Public and Private Financing: Initial Offerings, Seasoned Offerings, and Investment Banks Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Going public establishes a market value for the firm's stock,

Ch 19 Lease Financing Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Many leases written today combine the features of operating and financial leases. Such leases are often called "combination leases."

Ch 02 Financial Statements, Cash Flow, and Taxes Cengage Learning Testing, Powered by Cognero Page 39 Cengage Learning Testing, Powered by Cognero Page 39 Cengage Learning Testing, Powered by Cognero Page 39 55. DeYoung Devices Inc., a new high-tech instrumentation firm, is building and equipping a new manufacturing

Ch 02 Financial Statements, Cash Flow, and Taxes Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 STATE STANDARDS: United States - AK - DISC: Financial statements, anal - DISC: Financial statements, analysis,

Ch 02 Financial Statements, Cash Flow, and Taxes Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. The annual report contains four basic financial statements: the income statement,

Ch 20 Hybrid Financing: Preferred Stock, Warrants, and Convertibles Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. The "preferred" feature of preferred stock means that it normally will provide a higher

Ch 21 Dynamic Capital Structures and Corporate Valuation Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. The present value of the free cash flows discounted at the unlevered cost of equity

Ch 22 Mergers and Corporate Control Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. In a merger with true synergies, the post-merger value exceeds the sum of the separate companies' pre-merger

Ch 22 Mergers and Corporate Control Cengage Learning Testing, Powered by Cognero Page 15 Cengage Learning Testing, Powered by Cognero Page 15 Cengage Learning Testing, Powered by Cognero Page 15 26. If the capital structure is stable, and free cash flows are expected to be growing at

Ch 23 Enterprise Risk Management Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. One objective of risk management can be to reduce the volatility of a firm's cash flows. a.

Ch 24 Bankruptcy, Reorganization, and Liquidation Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. A central question that must be addressed in bankruptcy proceedings is whether the firm's inability to meet

Ch 25 Portfolio Theory and Asset Pricing Models KQBA-CRSU-QQMB-GOSS-NPBA-GOSS-RPUB-CCAG-CA3T-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE KQBA-CRSU-QQMB-GOSS-NPBA-GOSS-RPUB-CCAG-CA3T-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE KQBA-CRSU-QQMB-GOSS-NPBA-GOSS-RPUB-CCAG-CA3T-E7JI-YT4D-JFNN-4OTI- GO4W-NQNBEE Cengage Learning Testing, Powered by Cognero Page 15 Cengage Learning Testing, Powered by Cognero Page 15 Cengage Learning Testing, Powered by Cognero Page 15 22. Suppose that (1) investors expect a 4.0% rate

Ch 25 Portfolio Theory and Asset Pricing Models Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. The slope of the SML is determined by the value of beta. a. True

Ch 26 Real Options Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. Real options exist when managers have the opportunity, after a project has been implemented, to

Ch 27 Providing and Obtaining Credit Cengage Learning Testing, Powered by Cognero Page 15 Cengage Learning Testing, Powered by Cognero Page 15 Cengage Learning Testing, Powered by Cognero Page 15 TOPICS: Incremental profits KEYWORDS: Blooms: Analysis OTHER: TYPE: Multiple Choice: Multi-part NOTES: The problems referring to Exhibit 27.3

Ch 27 Providing and Obtaining Credit Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 True / False 1. The credit period is the amount of time it takes to do a

Ch 28 Advanced Issues in Cash Management and Inventory Control Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. The cash balances of most firms consist of transactions, compensating, precautionary, and speculative

Ch 28 Advanced Issues in Cash Management and Inventory Control Cengage Learning Testing, Powered by Cognero Page 12 Cengage Learning Testing, Powered by Cognero Page 12 Cengage Learning Testing, Powered by Cognero Page 12 KEYWORDS: Blooms: Analysis OTHER: TYPE: Multiple Choice: Conceptual DATE CREATED: 8/26/2015 10:48 AM DATE

Ch 29 Pension Plan Management Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Under a defined contribution plan, employees agree to contribute some percentage of their salaries, up to 20 percent,

Ch 03 Analysis of Financial Statements forecasting, and cash flows LOCAL STANDARDS: United States - OH - Default City - TBA TOPICS: Effect of lowering the DSO on net income KEYWORDS: Blooms: Analysis OTHER: TYPE: Multiple Choice: Problem DATE CREATED: 8/26/2015 10:43 AM DATE MODIFIED: 8/26/2015 10:43 AM QUESTION

Ch 03 Analysis of Financial Statements Cengage Learning Testing, Powered by Cognero Page 61 Cengage Learning Testing, Powered by Cognero Page 61 Cengage Learning Testing, Powered by Cognero Page 61 e. 16.86 ANSWER: b RATIONALE: Stock price $33.50 EPS $2.30 P/E 14.57 POINTS: 1 DIFFICULTY: Difficulty: Easy

Ch 03 Analysis of Financial Statements Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Ratio analysis involves analyzing financial statements in order to appraise a firm's financial position and strength.

Ch 03 Analysis of Financial Statements Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 a. The division's DSO (days' sales outstanding) is 40, whereas the average for its competitors is 30.

Ch 30 Financial Management in Not-for-Profit Businesses Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. The primary goal of investor-owned firms is shareholder wealth maximization, while the primary goal of not-for-profit

Ch 04 Time Value of Money ANSWER: e RATIONALE: N 12 rNOM 11.0% Per. r 0.9167% PV $72,500 PMT $6,407.67 FV $0 % prin. = Prin2/PMT = 90.45% Amortization schedule (first 4 months) Month Beg. Balance Payment Interest Principal Ending Balance 1 72,500.00 6,407.67 664.58 5,743.09 66,756.91 2 66,756.91

Ch 04 Time Value of Money Cengage Learning Testing, Powered by Cognero Page 81 Cengage Learning Testing, Powered by Cognero Page 81 Cengage Learning Testing, Powered by Cognero Page 81 before the account is exhausted, i.e., before the account balance would become negative? (Hint: Round down to the

Ch 04 Time Value of Money Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 d. An account that pays 7% nominal interest with daily (365-day) compounding. e. An account that

Ch 04 Time Value of Money Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 e. Time lines can be constructed for annuities where the payments occur at either the beginning or

Ch 04 Time Value of Money Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Starting to invest early for retirement increases the benefits of compound interest. a. True b.

Ch 04 Time Value of Money Cengage Learning Testing, Powered by Cognero Page 101 Cengage Learning Testing, Powered by Cognero Page 101 Cengage Learning Testing, Powered by Cognero Page 101 TOPICS: Amortization: payment KEYWORDS: Blooms: Analysis OTHER: TYPE: Multiple Choice: Problem DATE CREATED: 8/26/2015 10:44 AM DATE MODIFIED:

Ch 04 Time Value of Money Cengage Learning Testing, Powered by Cognero Page 61 Cengage Learning Testing, Powered by Cognero Page 61 Cengage Learning Testing, Powered by Cognero Page 61 4OTI-GO4W-NQNBEE 4OTI-GO4W-NQNBEE 4OTI-GO4W-NQNBEE 93. You are hoping to buy a new boat 3 years from now,

Ch 05 Bonds, Bond Valuation, and Interest Rates Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. If a firm raises capital by selling new bonds, it is called the "issuing firm,"

Ch 05 Bonds, Bond Valuation, and Interest Rates Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 TOPICS: Yields to maturity and call KEYWORDS: Blooms: Analysis OTHER: TYPE: Multiple Choice: Problem DATE CREATED:

Ch 05 Bonds, Bond Valuation, and Interest Rates Cengage Learning Testing, Powered by Cognero Page 56 Cengage Learning Testing, Powered by Cognero Page 56 Cengage Learning Testing, Powered by Cognero Page 56 DATE MODIFIED: 8/26/2015 10:44 AM QUESTION ID: JFND-GO4G-EO5U-CT1R QUESTION GLOBAL ID: GCID-E7BW-1TBP-CE3D-EA3U-CPTG-GA3W-GYA1-4AJW-8BTN-4A3Z-GY4N-4QJZ-GJO1-4PBS-CT1G-ECJW-GIDI-GWN8-EPRW-EMMN-GC4S-KCJ3-CEHU-RP3W-GRSU-RCBU-CESU-NPT1-GOSU-EQJA-CESU-QCUR-COAU-CATA-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE DATE MODIFIED: 8/26/2015 10:44

Ch 05 Bonds, Bond Valuation, and Interest Rates Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 d. $7,706,000 e. $7,898,650 ANSWER: b RATIONALE: Calculate the price of each bond: Coupon

Ch 06 Risk and Return Cengage Learning Testing, Powered by Cognero Page 80 Cengage Learning Testing, Powered by Cognero Page 80 Cengage Learning Testing, Powered by Cognero Page 80 HAS VARIABLES: False LEARNING OBJECTIVES: FMTP.EHRH.17.06.07 - LO: 6-7 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE STANDARDS: United

Ch 06 Risk and Return Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. The tighter the probability distribution of its expected future returns, the greater the risk of a given investment

Ch 06 Risk and Return Cengage Learning Testing, Powered by Cognero Page 61 Cengage Learning Testing, Powered by Cognero Page 61 Cengage Learning Testing, Powered by Cognero Page 61 b. The y-axis intercept would increase, and the slope would decline. c. The SML would be affected

Ch 06 Risk and Return Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 DATE MODIFIED: 8/26/2015 10:45 AM QUESTION ID: JFND-GO4G-EO5U-CCJS QUESTION GLOBAL ID: GCID-E7BW-1TBP-GJ1G-N3DF-CR5D-OCJ3-CFT1-4ATO-GBTN-4CTZ-CW4N-4AJU-GO31-4PJZ-GTTS-CP5N-GPDI-GWN8-EPRW-EMJA-CCAS-GQBI-CAAD-C3DD-GYSU-NA31-8RSU-EPDG-GOSS-NPTA-CESS-RPBZ-GTTS-GC3U-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE DATE MODIFIED: 8/26/2015 10:45 AM QUESTION ID:

Ch 06 Risk and Return Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 d. The combined portfolio's standard deviation will be equal to a simple average of the two portfolios' standard

Ch 07 Corporate Valuation and Stock Valuation Cengage Learning Testing, Powered by Cognero Page 55 Cengage Learning Testing, Powered by Cognero Page 55 Cengage Learning Testing, Powered by Cognero Page 55 rM 10.5% g 6.5% D1 = D0(1 + g) = $0.7988 rs = rRF + b(rM RRF)

Ch 07 Corporate Valuation and Stock Valuation Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. A proxy is a document giving one party the authority to act for another party, including

Ch 07 Corporate Valuation and Stock Valuation Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 HAS VARIABLES: False LEARNING OBJECTIVES: FMTP.EHRH.17.07.06 - LO: 7-6 NATIONAL STANDARDS: United States - BUSPROG: Analytic STATE

Ch 07 Corporate Valuation and Stock Valuation NOTES: Question may require calculations to find the correct answer. DATE CREATED: 8/26/2015 10:45 AM DATE MODIFIED: 8/26/2015 10:45 AM QUESTION ID: JFND-GO4G-EO5U-QTJA QUESTION GLOBAL ID: GCID-E7BW-1TBP-GPTD-OPTW-GI1D-NC33-8Y5N-4PTZ-GTTN-4PTW-CW4N-4PDG-CTUN-4C3A-CWHD-NAJA-CFDI-GWN8-EPRW-EMMN-CITU-KP5F-GPOS-NPT1-GRSS-CPDN-CRSU-CCT1-GOSS-CQJU-8RSU-QCJU-GWHU-GCTI-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE NOTES: Question may require calculations to find the correct answer. DATE CREATED: 8/26/2015 10:45

Ch 09 The Cost of Capital Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. "Capital" is sometimes defined as funds supplied to a firm by investors. a. True b.

Ch 09 The Cost of Capital Cengage Learning Testing, Powered by Cognero Page 55 Cengage Learning Testing, Powered by Cognero Page 55 Cengage Learning Testing, Powered by Cognero Page 55 QUESTION TYPE: Multiple Choice HAS VARIABLES: False LEARNING OBJECTIVES: FMTP.EHRH.17.09.09 - LO: 9-9 NATIONAL STANDARDS: United States -

Ch 09 The Cost of Capital Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 a. 11.15% b. 11.73% c. 12.35% d. 13.00% e. 13.65% ANSWER: d RATIONALE:

Ch 09 The Cost of Capital LOCAL STANDARDS: United States - OH - Default City - TBA TOPICS: Cost of common: BY + RP KEYWORDS: Blooms: Application OTHER: TYPE: Multiple Choice: Problem DATE CREATED: 8/26/2015 10:46 AM DATE MODIFIED: 8/26/2015 10:46 AM QUESTION ID: JFND-GO4G-EO5U-QPND QUESTION GLOBAL ID: GCID-E7BW-1TBP-GY3U-QCDG-GPOS-RPBI-GWAN-4PMD-CEHN-4CB1-CO4N-4QB1-CFO1-4CUG-8B1D-CP5R-CJDI-GWN8-EPRW-EMMD-GEAS-GQMG-CAHS-K3BZ-CESU-YA5D-8RSU-RPMN-GOSU-GCJA-CASU-CCTS-8R5D-NP33-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE

Ch 16 Supply Chains and Working Capital Management Cengage Learning Testing, Powered by Cognero Page 76 Cengage Learning Testing, Powered by Cognero Page 76 Cengage Learning Testing, Powered by Cognero Page 76 STATE STANDARDS: United States - AK - DISC: Working capital management LOCAL STANDARDS: United States -

Ch 16 Supply Chains and Working Capital Management Cengage Learning Testing, Powered by Cognero Page 61 Cengage Learning Testing, Powered by Cognero Page 61 Cengage Learning Testing, Powered by Cognero Page 61 DATE CREATED: 8/26/2015 10:47 AM DATE MODIFIED: 8/26/2015 10:47 AM QUESTION ID: JFND-GO4G-EO4D-1PBO QUESTION GLOBAL ID:

Ch 16 Supply Chains and Working Capital Management Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 Cengage Learning Testing, Powered by Cognero Page 41 QUESTION ID: JFND-GO4G-EO4D-1PT1 QUESTION GLOBAL ID: GCID-E7BW-1TBP-CW3D-NPBZ-CO3G-K3UD-GO4N-4P3U-GBO1-4PJT-CW4N-4CUB-CW3N-4PB1-GI1U-YPBO-8FDI-GWN8-EPRW-EMJO-CR3G-RPBT-GI1U-CPDR-CCSS-KAMG-CRSS-RCUR-GOSU-OCTZ-GWSS-RA31-CO4U-YATS-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE QUESTION ID: JFND-GO4G-EO4D-1PT1 QUESTION GLOBAL ID: GCID-E7BW-1TBP-CW3D-NPBZ-CO3G-K3UD-GO4N-4P3U-GBO1-4PJT-CW4N-4CUB-CW3N-4PB1-GI1U-YPBO-8FDI-GWN8-EPRW-EMJO-CR3G-RPBT-GI1U-CPDR-CCSS-KAMG-CRSS-RCUR-GOSU-OCTZ-GWSS-RA31-CO4U-YATS-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE QUESTION ID:

Ch 16 Supply Chains and Working Capital Management CW3N-4PB1-GI1U-YPBO-8FDI-GWN8-EPRW-EMMG-8RAD-KP5F-CC5D-OCJU-8YSU-OPTA-CESS-GCTI-GOSU-YQBZ-GHSU-NPTU-GC3G-GPJ1-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE CW3N-4PB1-GI1U-YPBO-8FDI-GWN8-EPRW-EMMG-8RAD-KP5F-CC5D-OCJU-8YSU-OPTA-CESS-GCTI-GOSU-YQBZ-GHSU-NPTU-GC3G-GPJ1-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE CW3N-4PB1-GI1U-YPBO-8FDI-GWN8-EPRW-EMMG-8RAD-KP5F-CC5D-OCJU-8YSU- OPTA-CESS-GCTI-GOSU-YQBZ-GHSU-NPTU-GC3G-GPJ1-E7JI-YT4D-JFNN-4OTI- GO4W-NQNBEE Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 Cengage Learning Testing, Powered by Cognero Page 21 32. Fireside Inc. has the following data. What is

Ch 16 Supply Chains and Working Capital Management Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 Cengage Learning Testing, Powered by Cognero Page 1 1. Which of the following will cause an increase in net working capital, other things held