Question
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$15.00 FIN/200
- From Mathematics: General-Mathematics
- Closed, but you can still post tutorials
- Due on Apr. 26, 2009
- Asked on Apr 26, 2009 at 3:12:12PM
Q:Please Help!!! Only respond if you know the correct answers, please!!!
1) Insider trading occurs when
A. someone has information not available to the public which they use to profit from trading in stocks.
B. any stock transactions occur in violation of the Federal Trade Commissions restrictions on monopolies.
C. corporate officers buy stock in their company.
D. lawyers, investment bankers, and others buy common stock in companies represented by their firms.
2) What is the primary goal of financial management?
A. Increased earnings
B. Minimizing risk of the firm
C. Maximizing cash flow
D. Maximizing shareholder wealth
3) Regarding risk levels, financial managers should
A. pursue higher risk projects because they increase value
B. evaluate investor's desire for risk
C. avoid higher risk projects because they destroy value
D. focus primarily on market fluctuations
4) Which of the following is an inflow of cash?
A. funds spent in normal business operations
B. the sale of the firm's bonds
C. the purchase of a new factory
D. the retirement of the firm's bonds
5) The statement of cash flows does NOT include which of the following sections?
A. cash flows from operating activities
B. cash flows from investing activities
C. cash flows from sales activities
D. cash flows from financing activities
6) Which of the following is not a primary source of capital to the firm?
A. assets
B. preferred stock
C. common stock
D. bonds
7) If a firm has both interest expense and lease payments,
A. times interest earned will be smaller than fixed charge coverage.
B. times interest earned will be the same as fixed charge coverage.
C. times interest earned will be greater than fixed charge coverage.
D. fixed charge coverage cannot be computed.
8) For a given level of profitability as measured by profit margin, the firm's return on equity will
A. increase as its debt-to-assets ratio decreases.
B. increase as its debt-to assets ratio increases.
C. decrease as its current ratio increases.
D. decrease as its times-interest-earned ratio decreases.
9) In examining the liquidity ratios, the primary emphasis is the firm's
A. ability to effectively employ its resources.
B. ability to pay short-term obligations on time.
C. overall debt position.
D. ability to earn an adequate return.
13) The percent-of-sales method of financial forecasting
A. is more detailed than a cash budget approach.
B. requires more time than a cash budget approach.
C. assumes that balance sheet accounts maintain a constant relationship to sales.
D. provides a month-to-month breakdown of data.
14) In financial statements, the number of units shown in cost of goods sold as compared to the number of the units actually produced
A. is higher.
B. is lower.
C. is the same.
D. can be either higher or lower.
15) In general, the larger the portion of a firm's sales that are on credit, the
A. lower will be the firm's need to borrow.
B. higher will be the firm's need to borrow.
C. more rapidly credit sales will be paid off.
D. more the firm can buy raw materials on credit.
16) A firm utilizing LIFO inventory accounting would, in calculating gross profits, assume that
A. all sales were from current production.
B. all sales were from beginning inventory.
C. sales were from current production until current production was depleted, and then use sales from beginning inventory.
D. all sales were for cash.
17) The pro forma income statement is important to the overall process of constructing pro forma statements because it allows us to determine a value for:
A. change in retained earnings.
B. gross profit.
C. interest expense.
D. prepaid expenses.
18) A firm has beginning inventory of 300 units at a cost of $11 each. Production during the period was 650 units at $12 each. If sales were 700 units, what is the cost of goods sold (assume FIFO)?
A. $9,000
B. $8,000
C. $7,700
D. $8,100
19) When a firm employs no debt
A. it has a financial leverage of one.
B. it has a financial leverage of zero.
C. its operating leverage is equal to its financial leverage.
D. it will not be profitable.
20) Under which of the following conditions could the overuse of financial leverage be detrimental to the firm?
A. Stable industry
B. Cyclical demand for the firm's products.
C. Upswing of business cycle.
D. Low interest cost compared to return on assets
21) Firms with a high degree of operating leverage are
A. trading off higher fixed costs for lower per-unit variable costs.
B. significantly affected by changes in interest rates.
C. easily capable of surviving large changes in sales volume
D. usually trading off lower levels of risk for higher profits.
22) A firm's break-even point will rise if
A. variable cost per unit rises
B. price per unit rises
C. fixed costs decrease
D. contribution margins increase
23) If TechCor has fixed costs of $80,000, variable costs of $1.20/unit, sales price/unit of $6, and depreciation expense of $25,000, what is their cash breakeven in units?
A. 45,833
B. 21,875
C. 9,167
D. 11,458
24) If a firm has a price of $4.00, variable cost per unit of $2.50 and a breakeven point of 20,000 units, fixed costs are equal to:
A. $50,000
B. $30,000
C. $13,333
D. $10,000
25) When the yield curve is upward sloping, generally a financial manager should:
A. lease
B. wait for future financing
C. utilize long-term financing
D. utilize short-term financing
26) A conservatively financed firm would
A. use long-term financing for permanent current assets and fixed assets and a portion of the short-term fluctuating assets and use short-term financing for all other short-term assets
B. use equity to finance fixed assets, long-term debt to finance permanent assets, and short-term debt to finance fluctuating current assets.
C. use long-term financing for all fixed assets and short-term financing for all other assets.
D. finance a portion of permanent assets and short-term assets with short-term debt.
27) During tight money periods
A. the relationship between short and long-term rates remains unchanged.
B. short-term rates are higher than long-term rates.
C. short-term rates are equal to long-term rates.
D. long-term rates are higher than short-term rates.
28) Which of the following combinations of asset structures and financing patterns is likely to create the least volatile earnings?
A. Liquid assets and heavy short-term borrowing
B. Illiquid assets and heavy long-term borrowing
C. Liquid assets and heavy long-term borrowing
D. Illiquid assets and heavy short-term borrowing
29) Risk exposure due to heavy short-term borrowing can be compensated for by
A. carrying more receivables to increase cash flow.
B. carrying illiquid assets.
C. carrying longer term, more profitable current assets.
D. carrying highly liquid assets.
30) An aggressive, risk-oriented firm will likely
A. borrow short-term and carry high levels of liquidity.
B. borrow short-term and carry low levels of liquidity.
C. borrow long-term and carry high levels of liquidity.
D. borrow long-term and carry low levels of liquidity.
