Archives: Quiz
Chapter 13 4 How Many Possible Irrs Could You
67. How many possible IRRs could you find for the following set of cash flows? AACSB: Analytic Blooms: Apply Difficulty: 1 Easy Learning Objective: 13-05 Use NPV profiles to reconcile sources of conflict between NPV and IRR methods. Topic: Multiple […]
Chapter 13 3 Suppose Your Firm Considering Two Mutually
47. A. Accept both A and B B. Accept neither A nor B C. Accept A, reject B D. Reject A, accept B Suppose your firm is considering two mutually exclusive, required projects with the cash flows shown as follows. […]
Chapter 13 2 Compute The Mirr For Project And
I 15.73 AACSB: Analytic Blooms: Analyze Blooms: Apply Difficulty: 1 Easy Learning Objective: 13-04 Calculate and use the internal rate of return (IRR) and the modified internal rate of return (MIRR) methods for evaluating capital investment opportunities. Topic: MIRR 29. […]
Chapter 13 1 Discounted Paybackb Net Present Valuec Internal Rate
Chapter 13 Weighing Net Present Value and Other Capital Budgeting Criteria Answer Key Multiple Choice Questions 1. Of the capital budgeting techniques discussed, which works equally well with normal and non-normal cash flows and with independent and mutually exclusive projects? […]
Chapter 12 5 Due Rapid Growth Computer Superstore Contemplating
93. You are trying to pick the least expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $13,000 to purchase and which will have OCF of – $1,200 annually throughout the vehicle’s […]
Chapter 12 4 Your Firm Needs Computerized Machine Tool
71. Your firm needs a computerized machine tool lathe that costs $50,000, requires $10,000 in installation, $5,000 in freight charges, and another $12,000 in maintenance for each year of its three-year life. After three years, this machine will be replaced. […]
Chapter 12 3 Suppose You Sell Fixed Asset For
50. You are evaluating a product for your company. You estimate the sales price of product to be $375 per unit and sales volume to be 500 units in year 1; 1,000 units in year 2; and 200 units in […]
Chapter 12 2 You Are Considering The Purchase One
30. You are considering the purchase of one of two machines used in your manufacturing plant. Machine A has a life of two years, costs $100 initially, and then $150 per year in maintenance costs. Machine B costs $200 initially, […]
Chapter 12 1 Concerning incremental project cash flow
Chapter 12 Estimating Cash Flows on Capital Budgeting Projects Answer Key Multiple Choice Questions 1. As new capital budgeting projects arise, we must estimate: 2. Which of these is the process of estimating expected future cash flows of a project […]
Chapter 11 5 Suppose New Project Was Going Financed
103. Suppose a new project was going to be financed partially with retained earnings. What flotation costs should you use for retained earnings? AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Blooms: Understand Difficulty: 2 Medium Learning Objective: 11-08 Demonstrate how […]
Chapter 11 4 Tafkap Industries Has Million Shares Stock
76. TAFKAP Industries has 8 million shares of stock outstanding selling at $17 per share and an issue of $20 million in 7.5 percent, annual coupon bonds with a maturity of 15 years, selling at 109 percent of par ($1,000). […]
Chapter 11 3 Rings Things Industries Has Million Shares
53. Rings N Things Industries has 40 million shares of common stock outstanding, 20 million shares of preferred stock outstanding, and 50 thousand bonds. If the common shares are selling for $25 per share, the preferred shares are selling for […]
Chapter 11 2 Suppose That Tipsntoes Incs Capital Structure
33. Paper Exchange has 80 million shares of common stock outstanding, 60 million shares of preferred stock outstanding, and 50 thousand bonds. If the common shares are selling for $20 per share, the preferred shares are selling for $10 per […]
Chapter 11 1 Which of these statements is true regarding calculating
Chapter 11 Calculating the Cost of Capital Answer Key Multiple Choice Questions 1. When calculating the weighted average cost of capital, weights are based on: 2. A. always going to have assumptions that will hold true. B. adjustable for stocks […]
Chapter 10 4 Stock Has Expected Return 145 Percent
85. A stock has an expected return of 14.5 percent, the risk-free rate is 4 percent and the return on the market is 11 percent. What is this stock‘s beta? AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard […]
Chapter 10 3 The Nasdaq Stock Market Bubble Peaked
61. The Nasdaq stock market bubble peaked at 10,816 in 2000. Two and a half years later it had fallen to 4,000. What was the percentage decline? A. -63.02% B. -69.47% C. -57.13% D. -49.18% Market decline = (4,000 – […]
Chapter 10 2 Stock Market Bubble The Nasdaq Stock
38. Stock Market Bubble If the NASDAQ stock market bubble peaked at 3,750, and two and a half years later it had fallen to 2,200, what would be the percentage decline? A. -15.87 percent B. -17.05 percent C. -41.33 percent […]
Chapter 10 1 Which of the following is the asset pricing theory based
Chapter 10 Estimating Risk and Return Answer Key Multiple Choice Questions 1. Which of the following is a true statement? A. The risk and return that a firm experienced in the past is also the risk level for its future. […]
Chapter 9 5 What is the source of firm-specific risk?
105. From 1950 to 2007, the average return in the stock market, as measured by the S&P 500, was 13.2 percent and a standard deviation of 17 percent. Given this information, which of the following statements is correct? A. With […]
Chapter 9 4 Interest Rates Inflation And Economic Growth
83. Interest rates, inflation and economic growth are economic factors that are examples of: 84. A. For a few firms in completely different industries, it is possible to have a correlation that approaches –2.0. B. A correlation of -1.0 means […]
Chapter 9 3 Fedex Corp Stock Ended The Previous
56. FedEx Corp. stock ended the previous year at $113.39 per share. It paid a $0.40 per share dividend last year. It ended last year at $126.69. If you owned 300 shares of FedEx, what was your dollar return and […]
Chapter 9 2 Portfolio Weights Investor Owns 10000 Adobe
32. Portfolio Weights An investor owns $10,000 of Adobe Systems stock, $15,000 of Dow Chemical, and $25,000 of Office Depot. What are the portfolio weights of each stock? AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 1 Easy Learning Objective: […]
Chapter 9 1 What Was Your Percent Returna 167
Chapter 09 Characterizing Risk and Return Answer Key Multiple Choice Questions 1. Which of these includes any capital gain (or loss) that occurred as well as any income that you received from a specific investment? 2. A. Average return B. […]
Chapter 8 4 Which The Following Statements Incorrect Trading
92. Which of the following statements is incorrect? AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 08-02 Know how stock exchanges function. Learning Objective: 08-03 Track the wider stock market with stock indexes and differentiate among […]
Chapter 8 3 Pe Model And Cash Flow Valuation
58. P/E Model and Cash Flow Valuation Suppose that a firm’s recent earnings per share and dividends per share are $2.50 and $1.00, respectively. Both are expected to grow at 10 percent. However, the firm’s current P/E ratio of 22 […]
Chapter 8 2 Dividend Growth Annual Dividends Walmart Stores
36. A. $65.40 B. $66.67 C. $65.57 D. $79.14 0 CF0 2.00 C01, 1 F01 77.14 C02, 1 F02 10 I NPV = 65.57 Value of Dividends and Future Price A firm is expected to pay a dividend of $2.00 […]
Chapter 8 1 all of the stock listed on the New York Stock Exchange
Chapter 08 Valuing Stocks Answer Key Multiple Choice Questions 1. Which of these investors earn returns from receiving dividends and from stock price appreciation? A. Bondholders B. Stockholders C. Investment bankers D. Managers AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: […]
Chapter 7 5 Bond Selling Discount Which The Following
114. If a bond is selling at a discount, which of the following statements is correct? AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Create Difficulty: 3 Hard Learning Objective: 07-06 Compute bond yields. Topic: Current Yield 115. If a bond […]
Chapter 7 4 The Bond Can Called Six Years
86. An 8 percent coupon municipal bond has 15 years left to maturity and has a price quote of 98.5. The bond can be called in six years. The call premium is one year of coupon payments. Compute the bond’s […]
Chapter 7 3 The Bond Purchased The Beginning The
59. Comparing Bond Yields A client in the 35 percent marginal tax bracket is comparing a municipal bond that offers a 4.25 percent yield to maturity and a similar-risk corporate bond that offers a 5.10 percent yield. Which bond will […]
Chapter 7 2 Zero Coupon Bond Price Calculate The
35. TIPS Interest and Par Value A 3.75 percent TIPS has an original reference CPI of 175.8. If the current CPI is 207.7, what is the current interest payment and par value of the TIPS? (Assume semi-annual interest payments and […]
Chapter 7 1 Treasury bond holders are not taxed at the federal level
Chapter 07 Valuing Bonds Answer Key Multiple Choice Questions 1. Which of these statements is false? 2. A. Corporations B. Federal government or its agencies C. State and local governments D. All of these AACSB: Reflective Thinking Accessibility: Keyboard Navigation […]
Chapter 6 5 Which The Following Statements Incorrect The
94. Which of the following statements is incorrect? 95. A. GE sells $30 million of new preferred stock. B. Microsoft sells $2 million of IBM preferred stock out of its marketable securities portfolio. C. the Magellan Fund buys $100 million […]
Chapter 6 4 The Wall Street Journal Reports That
74. The Wall Street Journal reports that the current rate on five-year Treasury bonds is 6.45 percent and on 10-year Treasury bonds is 7.75 percent. Assume that the maturity risk premium is zero. Calculate the expected rate on a five-year […]
Chapter 6 3 You Are Considering Investment 30year Bonds
54. You are considering an investment in 30-year bonds issued by Moore Corporation. The bonds have no special covenants. The Wall Street Journal reports that one-year T-bills are currently earning 3.55 percent. Your broker has determined the following information about […]
Chapter 6 2 Interest Rates The Wall Street Journal
34. Liquidity Premium Hypothesis Based on economists’ forecasts and analysis, one-year Treasury bill rates and liquidity premiums for the next four years are expected to be as follows: Using the liquidity premium hypothesis, what is the current rate on a […]
Chapter 6 1 Which These Provide Forum Which Demanders Funds
Chapter 06 Understanding Financial Markets and Institutions Answer Key Multiple Choice Questions 1. Which of these provide a forum in which demanders of funds raise funds by issuing new financial instruments, such as stocks and bonds? AACSB: Reflective Thinking Accessibility: […]
Chapter 5 7 Which The Following Will Increase The
147. Which of the following will increase the present value of an annuity? AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-04 Compute the present value of an annuity. Topic: Present Value of an Annuity Essay […]
Chapter 5 6 You Started Your First Job After
135. You started your first job after graduating from college. Your company offers a retirement plan for which the company contributes 25 percent of what you contribute each year. You expect to contribute $5,000 per year from your salary. You […]
Chapter 5 5 Say That You Purchase House For
107. Say that you purchase a house for $150,000 by getting a mortgage for $135,000 and paying a $15,000 down payment. Assume you get a 15-year mortgage with a 6 percent interest rate. If the house appreciates at a 2 […]
Chapter 5 4 Perpetuity Pays 250 Per Year And
82. A perpetuity pays $250 per year and interest rates are 5.5 percent. How much would its value change if interest increased to 8.5 percent? Did the value increase or decrease? A. $1,604.27; increase B. $1,604.27; decrease C. $1,508.29; increase […]
Chapter 5 3 Number Annuity Payments Joey Realizes That
57. Number of Annuity Payments Joey realizes that he has charged too much on his credit card and has racked up $3,000 in debt. If he can pay $150 each month and the card charges 18 percent APR (compounded monthly), […]
Chapter 5 2 Future Value Annuity Due The Future
31. Future Value of an Annuity Due If the future value of an ordinary, 4-year annuity is $1,000 and interest rates are 6 percent, what is the future value of the same annuity due? AACSB: Analytic Accessibility: Keyboard Navigation Blooms: […]
Chapter 5 1that do not have time value of money implications
Chapter 05 Time Value of Money 2: Analyzing Annuity Cash Flows Answer Key Multiple Choice Questions 1. When saving for future expenditures, we can add the ________ of contributions over time to see what the total will be worth at […]
Chapter 4 5 Which The Following Investments Would You
125. Which of the following investments would you prefer? A. An investment earning 10 percent for 20 years B. An investment earning 8.5 percent for 20 years C. An investment earning 5 percent for 40 years D. An investment earning […]
Chapter 4 4 You Are Scheduled Receive 750 Cash
96. You are scheduled to receive a $750 cash flow in one year, a $1,000 cash flow in two years, and pay a $300 payment in four years. If interest rates are 6 percent per year, what is the combined […]
Chapter 4 3 Solving For Rates What Annual Rate
65. Solving for Rates What annual rate of return is earned on a $2,000 investment made in year 3 when it grows to $3,000 by the end of year 6? A. 6.99 percent B. 14.47 percent C. 24.00 percent D. […]
Chapter 4 2 Rates Over One Year Determine The
35. Rates over One Year Determine the interest rate earned on a $1,500 deposit when $1,680 is paid back in one year. AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Analyze Blooms: Apply Difficulty: 1 Easy Learning Objective: 04-07 Compute the rate […]
Chapter 4 1 The Rule of 72 is a simple mathematical approximation for
Chapter 04 Time Value of Money 1: Analyzing Single Cash Flows Answer Key Multiple Choice Questions 1. A. Cash inflows are designated with a positive number. B. Cash outflows are designated with a positive number. C. The cost is known […]
Chapter 3 6 Profit Margin Total Asset Turnover Equity Multiplier
128. Profitability Ratios In 2013, Colin’s Guitars, Inc. announced an ROA of 10.01 percent, ROE of 17.35 percent, and profit margin of 5.89 percent. The firm had total assets of $2 million at year-end 2013. Calculate the 2013 values of […]