A common-size balance sheet helps financial managers determine:
A. which customers are paying on a timely basis.
B. if costs are increasing faster or slower than sales.
C. if changes are occurring in a firms mix of assets.
D. if a firm is generating more or less sales per dollar of assets than in prior years.
E. the rate at which the firms dividends are changing.
The U.S. dollar equivalent is 0.4502 for the Brazilian real and 1.4729 for the UK
pound. Which one of the following statements is correct given this information?
A. One U.S. dollar will buy 0.4502 Brazilian real.
B. If you have 0.4502 Brazilian real, it is worth 1.4729 UK pounds.
C. One UK pound will buy 1.4729 U.S. dollars.
D. One Brazilian real will buy 1.4729 UK pounds.
E. One U.S. dollar will buy 1.4729 UK pounds.
Which one of the following will increase the operating cycle?
A. Decreasing the accounts payable period
B. Increasing the accounts payable turnover rate
C. Increasing the cash cycle
D. Decreasing the accounts receivable turnover rate
E. Decreasing the inventory period
What is the payback period for a $28,500 investment with the following cash flows?
A. 3.65 years
B. 3.89 years
C. 4.22 years
D. 4.44 years
E. The project never pays back.
The spot rate between Japan and the U.S. is 100.37 = $1, while the one-year forward
rate is 99.97 = $1. A one-year risk-free security in the U.S. is yielding 3.8 percent.
What is the rate of return on a one-year risk-free security in Japan assuming that interest
rate parity exists?
A. 3.32 percent
B. 3.39 percent
C. 3.44 percent
D. 3.49 percent
E. 3.56 percent
When is a firm insolvent from an accounting perspective?
A. When the firm is unable to meet its financial obligations in a timely manner
B. When the firms debt exceeds the value of the firms equity
C. When the firm has a negative net worth
D. When the firms revenues cease
E. When the market value of the firms equity equals zero
The dividend growth model can be used to value the stock of firms that pay which type
of dividends?I. Constant annual dividendII. Annual dividend with a constant increasing
rate of growthIII. Annual dividend with a constant decreasing rate of growthIV. Zero
dividend
A. I only
B. II only
C. II and III only
D. I, II, and III only
E. I, II, III, and IV
You would like to borrow money three years from now to build a new building. In
preparation for applying for that loan, you are in the process of developing target ratios
for your firm. Which set of ratios represents the best target mix considering that you
want to obtain outside financing in the relatively near future?
A. Times interest earned = 1.7; debt-equity ratio = 1.6
B. Times interest earned = 1.5; debt-equity ratio = 1.2
C. Cash coverage ratio = 0.8; debt-equity ratio = 0.8
D. Cash coverage ratio = 2.6; debt-equity ratio = 0.3
E. Cash coverage ratio = 0.5; total debt ratio = 0.2
For the period 1926-2011, which one of the following had the smallest risk premium?
A. Large-company stocks
B. Small-company stocks
C. Long-term corporate bonds
D. U.S. Treasury bills
E. Long-term government bonds
Which one of the following features applies to NASDAQ but not the NYSE?
A. Trading in the crowd
B. Multiple market maker system
C. SuperDot
D. Broker market
E. Physical trading floor
The amount of time that a firm holds inventory in stock is referred to as which one of
the following?
A. Inventory period
B. Accounts receivable period
C. Accounts payable period
D. Operating cycle
E. Cash cycle
Waldale Pools has total equity of $289,100 and net income of $64,500. The debt-equity
ratio is 0.55 and the total asset turnover is 1.6. What is the profit margin?
A. 3.10 percent
B. 5.23 percent
C. 5.67 percent
D. 9.00 percent
E. 22.31 percent