Menu Management Options Course Menu: FNS-203E-11 - FA 18-19 Principles of Financ
ID: 2821991 • Letter: M
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FNS-203E-11 - FA 18-19
Principles of Finance
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Take Test: Exam 1
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Instructions
[Up to 200 points] (Due Saturday 11:59pm): Complete Exam 1.
Exam 1 will cover Chapters 1-7. The exam will be open from 12:01 am on Thursday until 11:59 pm on Saturday. Once you begin, you will have two hours maximum to complete the exam and may not start over once begun.
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Remaining Time:
1 hour, 26 minutes, 31 seconds.
Question 1
The primary goal of the financial management is?
Increasing earnings
Maximizing shareholder wealth
Maximizing cash flow
Decreasing employee turnover
10 points
Question 2
Which of the following statement is true about the corporate form of business?
The corporate form has unlimited liability.
The corporate form is easier to form and faces less regulation.
The corporate form results in double taxation.
Sole proprietorships have limited liability.
10 points
Question 3
What is the nominal rate of interest if the real rate is 5% and the expected inflation rate is 3%?
8.15%
8.0%
5.0%
2.20%
10 points
Question 4
What is a firms net working capital if total current assets are $1,000,000; long-term debt is $400,000; total current liabilities are $600,000; and long-term assets are $800,000?
$0
$800,000
$200,000
$400,000
10 points
Question 5
What is the firm’s cash flow if cash from operating activities are $200,000, and fixed assets increased by $100,000, and the firm paid dividends of $50,000?
$50,000
$110,000
$90,000
$150,000
10 points
Question 6
Find the present value of $12,500 to be received 10 years from today if the discount rate is 8% compounded annually and rounded to the nearest $10.
$17,010
$5,790
$9,210
$11,574
10 points
Question 7
Which of the following may be converted to cash within one year (or one operating cycle)?
Current liability
Current asset
Long-term asset
Retained earning
10 points
Question 8
What is the present value of a $1000 par value bond, maturing in 17 years, with an annual coupon payment of $50? Assume a required rate of return of 6%.
$895.23
$856.29
$904.87
$822.90
10 points
Question 9
The price of a bond will:
Increase as interest rates increase.
Remain the same with any change in interest rates.
Decrease as interest rates increase.
None of the above.
10 points
Question 10
What is the present value of a $1000 par value bond, maturing in 6 years, with a 14% coupon rate? Interest is paid semi-annually and the investors’ required rate of return is 10%.
$1,099
$1,233
$1,177
$1,108
10 points
Question 11
What is the present value (rounded to the nearest dollar) of a 20 year annuity with payments of $4,500 per year at an interest rate of 5.5% per year?
$84,500
$53,777
$63,445
$56,734
10 points
Question 12
Ms. Michelle wants to buy a Lamborghini Countach. At a 6% interest rate, the monthly payments will be $1,375.00 for 60 months. How much (rounded to the nearest dollar) is Michelle buying the car for TODAY?
$71,123
$68,527
$94,645
$82,425
10 points
Question 13
The firm you are considering to invest in has a beta of 1.62. Currently, U.S. Treasury bills are yielding 6.75% and the expected return for the S & P 500 is 18.2%. What rate of return should you expect for your investment?
10.9%
25.3%
29.5%
16.8%
10 points
Question 14
Based on the information in Table 4-1, the current ratio is:
1.05
1.21
2.89
1.96
Description[Up to 200 points] (Due Saturday 11:59pm): Complete Exam 1.
InstructionsExam 1 will cover Chapters 1-7. The exam will be open from 12:01 am on Thursday until 11:59 pm on Saturday. Once you begin, you will have two hours maximum to complete the exam and may not start over once begun.
Timed Test This test has a time limit of 2 hours.This test will save and submit automatically when the time expires.Warnings appear when half the time, 5 minutes, 1 minute, and 30 seconds remain. Multiple Attempts Not allowed. This test can only be taken once. Force Completion Once started, this test must be completed in one sitting. Do not leave the test before clicking Save and Submit.
Explanation / Answer
1.The primary goal of the financial management is?
Option c Maximizing shareholder wealth
2.
Which of the following statement is true about the corporate form of business?
Option c The corporate form results in double taxation.
3. Nominal Rate = (1+inflation)*(1+real rate ) -1 =(1.03)*1.05 - 1 = 8.15%(Opion a)
4. What is a firms net working capital if total current assets are $1,000,000; long-term debt is $400,000; total current liabilities are $600,000; and long-term assets are $800,000?
Net working capital = Total current Assets - Total current Liabilities =1,000,000 - 600,000 = 400,000
ONLy 4 subparts can be solved as per chegg policy
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