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1) national groceries chooses to have it local stores make payments on their own
payables. national utilizes a
a.centralized payment system
b.fragmented payment system
c.decentralized payment system
d.none of the above
2) narrbegin: needsalift aprs
needsalift, inc. aprs
needsalift, inc. has $10 million in funds to distribute to its unsecured creditors. two sets
of possible claims are presented below.
narrend
for case i, how much will the bank receive for its notes payable claim?
a.$3.75 million
b.$4.29 million
c.$6.00 million
d.nothing
3) narrbegin: bavarian sausage scenario
bavarian sausage scenario
bavarian sausage is considering starting the production of a new chocolate filled
sausage. the company is not sure yet what the exact sales potential and costs of the
product will be. bavarian sausage has determined the following three possible
scenarios:
narrend
what is bavarian sausages breakeven point in the worst case scenario?
a.572
b.1,125
c.5,000
d.2,526
4) usually, only the riskiest type of firms will offer securities to the general public
through
a.a firm-commitment offering
b.a competitive offering
c.a negotiated offering
d.a best-efforts arrangement
5) calculate the monthly payment for a 20-year mortgage on a $3.5 million building at a
7.5% interest rate. assume that the entire building is financed and that payments are
made at the end of each month, starting at the end of the first month and ending at the
end of the last month.
a.$28,020.63
b.$28,195.76
c.$36,458.33
d.$61,947.83
6) the stock of alpha company has an expected return of 18% and a beta of 1.5, and
gamma company stock has an expected return of 15.6% and a beta of 1.2. assume the
capm holds. whats the risk-free rate?
a.8.0%
b.6.0%
c.0%
d.4.7%
7) you are analyzing the performance of different asset classes for a foreign economy.
you find that over the last 60 years the average annual return for equities was 12%
while that of corporate bonds was 10% and the rate of inflation was about 3%. if
inflation were projected to be around 1% for the foreseeable future, then what would
you project the return of equities to be during that same foreseeable period?
a.12%
b.11%
c.10%
d.9%
8) narrbegin: exhibit 8-3 invst prpsals
exhibit 8-3
a firm is evaluating two investment proposals. the following data is provided for the
two investment alternatives.
narrend
refer to exhibit 8-3. if the two projects are independent, which project should the firm
choose based on the irr rule?
a.project 1
b.project 2
c.both projects
d.cannot decide because the hurdle rate is unknown
9) a firm is considering investing $10 million today to start a new product line. the
future of the project is unclear however and depends on the state of the economy. the
project will last 5 years. the yearly cash flows for the project are shown below for the
different states of the economy. what is the expected npv for the project if the cost of
capital is 12%?
a.-$2.23 million
b.-$1.15 million
c.-$0.75 million
d.$0.81 million
10) the rules dictating voting procedures and other aspects of corporate governance for
a corporation are
a.the minutes of the board of directors meeting
b.the corporate charter
c.the institute for corporate governance corporate governance procedures
d.the securities and exchange commission rules for corporate governance
