1) for which of the following would missing (that is, not taking) the discount be the
least costly?
a.2/10 net 40
b.1/15 net 60
c.3/10 net 70
d.1/10 net 50
2) what is meant by the term double taxation as applied to the corporate form of
business organization?
a.corporate income as taxed at twice the rate of partnership income
b.corporate income is taxed, and then corporate dividends are taxed as well
c.corporations pay both federal income tax and state income tax on their earnings
d.corporations pay both income tax and sales taxes on their goods
3) narrbegin: bavarian brewhouse
bavarian brewhouse
capital structure information for bavarian brewhouse
narrend
what is bavarian brewhouses cost of common equity?
a.10.67%
b.12.55%
c.16.23%
d.15.48%
4) a simplified form of restructuring for farmers
a.chapter 9
b.chapter 12
c.chapter 13
d.chapter 15
5) when a financial intermediary repackages loans and other traditional bank-based
credit products into securities that can be sold to public investors we call that
a.privatization
b.securitization
c.asset substitution
d.none of the above
6) a young couple buys their dream house. after paying their down payment and closing
costs, the couple has borrowed $400,000 from the bank. the terms of the mortgage are
30 years of monthly payments at an apr of 6% with monthly compounding. what is the
monthly payment for the couple?
a.$2,398.20
b.$2,421.63
c.$2,697.98
d.$2,700.00
7) booyah company has a callable bond issue, with 55,000 bonds with $1000 par
outstanding. if the call price is $1125 per bond, and booyahs tax rate is 35%, what is the
after-tax cost of calling the bonds?
a.$10,576,925
b.$2,406,250
c.$6,875,000
d.$4,468,750
8) louis bonds have 14 years to maturity, with a coupon rate of 8%, paid annually; if the
appropriate discount rate is 12% what is the current yield of louis bonds?
a. 8.33%
b. 9.00%
c. 10.84%
d. 12.00%
9) financial managers prefer a capital budgeting technique with which of the following
characteristics?
a.easily-applied and considers cash flows
b.recognizes the time value of money and accounts for risk and return
c.when applied leads to higher stock prices
d.all of the above
e.(a) and (b) only
10) the cash budget:
a.is the same as a bank statement
b.typically spans a one-year time period
c.relies upon the sales forecast as a key input
d.is a statement of the firm’s planned inflows and outflows of cash
e.all of the above except (a)
11) consider the cash receipts projections of roxy inc. that is developing a cash budget
for october , november and december; sales in august and september were $600,000 and
$500,000 respectively. the forecast sales are $400,000, $300,000 and $200,000 for
october, november and december respectively. 20 % of sales are cash sales and 80% are
credit sales; collects about 70% of each months sales in the next month but waiting until
the following month for the remaining 10% of sales. bad debts are negligible. the firm
is expectsing cash dividend of $10,000 in december from a subsidiary.what are the
accounts receivable collected in november? (in thousands)
a.$330
b.$490
c.$255
d.$ 60