Chat with us, powered by LiveChat Question FIN 504 · ________ are obligations of the U.S. Treasury with common maturities of one to seven years and that are generally issued in minimum denominations of $5,000. A. Treasury notes B. Treasury bills C. Federal agency issues D. Banker's acceptances · The firm's financing requirements can be separated into A. current liabilities and long-term funds B. current assets and fixed assets C. current liabilities and long-term debt D. seasonal and permanent · Debt is generally the least expensive source of capital. This is primarily due to A. fixed interest payments B. its position in the priority of claims on assets and earnings in the event of liquidation C. the tax deductibility of interest payments D. the secured nature of a debt obliga · The capital impairment restrictions are established to A. reduce dividends equal to or below the current earnings level B. constrain the firm to paying dividends which do not require additional borrowing c protect the shareholder D provide a sufficient base to protect creditors' claims · The portion of a firm's current assets financed with long-term funds may be called A. working capital B. accounts receivable C. net working capital D. Inventory · Earnings before interest and taxes (EBIT) is a descriptive label for A. operating profits B. net profits before taxes C. earnings per share D. gross profits · At a firm's quarterly dividend meeting held on December 5, the directors declared a $1.50 per share cash dividend to be paid to the holders of record on Monday, January 1. Before the dividend was declared, the firm's accumulated retained earnings balance and cash balance were $1,280,000 and $30,000 respectively. The firm has 10,000 shares of common stock outstanding. On January 2, the cash, dividends payable, and retained earnings accounts had balances of A. $15,000, $0, and $1,265,000, respectively B. $30,000, $15,000, and $1,280,000, respectively C. $30,000, $0, and $1,265,000, respectively D. $15,000, $0, and $1,280,000, respectively · If a firm has a limited capital budget and too many good capital projects to fund them all, it is said to be facing the problem of A. constrained capital B. wealth optimization C. capital rationing D. profitability · ________ analysis is a technique used to assess the returns associated with various cost structures and levels of sales. A. Time-series B. Marginal C. Breakeven D. Ratio · Systematic risk is also referred to as A. diversifiable risk B. economic risk C. nondiversifiable risk D. Not Relevant · Net working capital is defined as A. a ratio measure of liquidity best used in cross-sectional analysis B. the portion of the firm's assets financed with short-term funds C. current liabilities minus current assets D. current assets minus current liabilities ________ is a series of equal annual cash flows. A. A mixed stream B. A conventional C. A non-conventional D. An annuity · A corporation is selling an existing asset for $21,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent on ordinary income and capital gains, the tax effect of this transaction is A. $0 tax liability B. $7,560 tax liability C. $4,400 tax liability D. $7,720 tax liability · The ________ is the rate of return a firm must earn on its investments in projects in order to maintain the market value of its stock. A. net present value B. cost of capital C. internal rate of return D. gross profit margin · A behavioral approach that evaluates the impact on the firm's return of simultaneous changes in a number of project variables is called A. sensitivity analysis B. scenario analysis C. simulation analysis D. All of the above · The objective of ________ is to select the group of projects that provides the highest overall net present value and does not require more dollars than are budgeted. A. capital rationing B. scenario analysis C. certainty equivalents D. sensitivity analysis · A corporation has decided to replace an existing asset with a newer model. Two years ago, the existing asset originally cost $30,000 and was being depreciated under MACRS using a five-year recovery period. The existing asset can be sold for $25,000. The new asset will cost $75,000 and will also be depreciated under MACRS using a five-year recovery period. If the assumed tax rate is 40 percent on ordinary income and capital gains, the initial investment is A. $42,000 B. $52,440 C. $54,240 D. $50,000 · A $60,000 outlay for a new machine with a usable life of 15 years is called A. capital expenditure B. operating expenditure C. replacement expenditure D. None of the above · A $60,000 outlay for a new machine with a usable life of 15 years is called A. capital expenditure B. operating expenditure C. replacement expenditure D. None of the above · A bank lends a firm $500,000 for one year at 8 percent and requires compensating balances of 10 percent of the face value of the loan. The effective annual interest rate associated with this loan is A. 8.9 percent B. 8 percent C. 7.2 percent D. 7.0 percent · Most firms employ ________ financing strategy. A. an aggressive B. a conservative C. a trade-off D. a seasonal · The theoretical basis from which the concept of risk-adjusted discount rates is derived is A. the Gordon model | Writedemy

Question FIN 504 · ________ are obligations of the U.S. Treasury with common maturities of one to seven years and that are generally issued in minimum denominations of $5,000. A. Treasury notes B. Treasury bills C. Federal agency issues D. Banker’s acceptances · The firm’s financing requirements can be separated into A. current liabilities and long-term funds B. current assets and fixed assets C. current liabilities and long-term debt D. seasonal and permanent · Debt is generally the least expensive source of capital. This is primarily due to A. fixed interest payments B. its position in the priority of claims on assets and earnings in the event of liquidation C. the tax deductibility of interest payments D. the secured nature of a debt obliga · The capital impairment restrictions are established to A. reduce dividends equal to or below the current earnings level B. constrain the firm to paying dividends which do not require additional borrowing c protect the shareholder D provide a sufficient base to protect creditors’ claims · The portion of a firm’s current assets financed with long-term funds may be called A. working capital B. accounts receivable C. net working capital D. Inventory · Earnings before interest and taxes (EBIT) is a descriptive label for A. operating profits B. net profits before taxes C. earnings per share D. gross profits · At a firm’s quarterly dividend meeting held on December 5, the directors declared a $1.50 per share cash dividend to be paid to the holders of record on Monday, January 1. Before the dividend was declared, the firm’s accumulated retained earnings balance and cash balance were $1,280,000 and $30,000 respectively. The firm has 10,000 shares of common stock outstanding. On January 2, the cash, dividends payable, and retained earnings accounts had balances of A. $15,000, $0, and $1,265,000, respectively B. $30,000, $15,000, and $1,280,000, respectively C. $30,000, $0, and $1,265,000, respectively D. $15,000, $0, and $1,280,000, respectively · If a firm has a limited capital budget and too many good capital projects to fund them all, it is said to be facing the problem of A. constrained capital B. wealth optimization C. capital rationing D. profitability · ________ analysis is a technique used to assess the returns associated with various cost structures and levels of sales. A. Time-series B. Marginal C. Breakeven D. Ratio · Systematic risk is also referred to as A. diversifiable risk B. economic risk C. nondiversifiable risk D. Not Relevant · Net working capital is defined as A. a ratio measure of liquidity best used in cross-sectional analysis B. the portion of the firm’s assets financed with short-term funds C. current liabilities minus current assets D. current assets minus current liabilities ________ is a series of equal annual cash flows. A. A mixed stream B. A conventional C. A non-conventional D. An annuity · A corporation is selling an existing asset for $21,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent on ordinary income and capital gains, the tax effect of this transaction is A. $0 tax liability B. $7,560 tax liability C. $4,400 tax liability D. $7,720 tax liability · The ________ is the rate of return a firm must earn on its investments in projects in order to maintain the market value of its stock. A. net present value B. cost of capital C. internal rate of return D. gross profit margin · A behavioral approach that evaluates the impact on the firm’s return of simultaneous changes in a number of project variables is called A. sensitivity analysis B. scenario analysis C. simulation analysis D. All of the above · The objective of ________ is to select the group of projects that provides the highest overall net present value and does not require more dollars than are budgeted. A. capital rationing B. scenario analysis C. certainty equivalents D. sensitivity analysis · A corporation has decided to replace an existing asset with a newer model. Two years ago, the existing asset originally cost $30,000 and was being depreciated under MACRS using a five-year recovery period. The existing asset can be sold for $25,000. The new asset will cost $75,000 and will also be depreciated under MACRS using a five-year recovery period. If the assumed tax rate is 40 percent on ordinary income and capital gains, the initial investment is A. $42,000 B. $52,440 C. $54,240 D. $50,000 · A $60,000 outlay for a new machine with a usable life of 15 years is called A. capital expenditure B. operating expenditure C. replacement expenditure D. None of the above · A $60,000 outlay for a new machine with a usable life of 15 years is called A. capital expenditure B. operating expenditure C. replacement expenditure D. None of the above · A bank lends a firm $500,000 for one year at 8 percent and requires compensating balances of 10 percent of the face value of the loan. The effective annual interest rate associated with this loan is A. 8.9 percent B. 8 percent C. 7.2 percent D. 7.0 percent · Most firms employ ________ financing strategy. A. an aggressive B. a conservative C. a trade-off D. a seasonal · The theoretical basis from which the concept of risk-adjusted discount rates is derived is A. the Gordon model

07 May Question FIN 504 · ________ are obligations of the U.S. Treasury with common maturities of one to seven years and that are generally issued in minimum denominations of $5,000. A. Treasury notes B. Treasury bills C. Federal agency issues D. Banker’s acceptances · The firm’s financing requirements can be separated into A. current liabilities and long-term funds B. current assets and fixed assets C. current liabilities and long-term debt D. seasonal and permanent · Debt is generally the least expensive source of capital. This is primarily due to A. fixed interest payments B. its position in the priority of claims on assets and earnings in the event of liquidation C. the tax deductibility of interest payments D. the secured nature of a debt obliga · The capital impairment restrictions are established to A. reduce dividends equal to or below the current earnings level B. constrain the firm to paying dividends which do not require additional borrowing c protect the shareholder D provide a sufficient base to protect creditors’ claims · The portion of a firm’s current assets financed with long-term funds may be called A. working capital B. accounts receivable C. net working capital D. Inventory · Earnings before interest and taxes (EBIT) is a descriptive label for A. operating profits B. net profits before taxes C. earnings per share D. gross profits · At a firm’s quarterly dividend meeting held on December 5, the directors declared a $1.50 per share cash dividend to be paid to the holders of record on Monday, January 1. Before the dividend was declared, the firm’s accumulated retained earnings balance and cash balance were $1,280,000 and $30,000 respectively. The firm has 10,000 shares of common stock outstanding. On January 2, the cash, dividends payable, and retained earnings accounts had balances of A. $15,000, $0, and $1,265,000, respectively B. $30,000, $15,000, and $1,280,000, respectively C. $30,000, $0, and $1,265,000, respectively D. $15,000, $0, and $1,280,000, respectively · If a firm has a limited capital budget and too many good capital projects to fund them all, it is said to be facing the problem of A. constrained capital B. wealth optimization C. capital rationing D. profitability · ________ analysis is a technique used to assess the returns associated with various cost structures and levels of sales. A. Time-series B. Marginal C. Breakeven D. Ratio · Systematic risk is also referred to as A. diversifiable risk B. economic risk C. nondiversifiable risk D. Not Relevant · Net working capital is defined as A. a ratio measure of liquidity best used in cross-sectional analysis B. the portion of the firm’s assets financed with short-term funds C. current liabilities minus current assets D. current assets minus current liabilities ________ is a series of equal annual cash flows. A. A mixed stream B. A conventional C. A non-conventional D. An annuity · A corporation is selling an existing asset for $21,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent on ordinary income and capital gains, the tax effect of this transaction is A. $0 tax liability B. $7,560 tax liability C. $4,400 tax liability D. $7,720 tax liability · The ________ is the rate of return a firm must earn on its investments in projects in order to maintain the market value of its stock. A. net present value B. cost of capital C. internal rate of return D. gross profit margin · A behavioral approach that evaluates the impact on the firm’s return of simultaneous changes in a number of project variables is called A. sensitivity analysis B. scenario analysis C. simulation analysis D. All of the above · The objective of ________ is to select the group of projects that provides the highest overall net present value and does not require more dollars than are budgeted. A. capital rationing B. scenario analysis C. certainty equivalents D. sensitivity analysis · A corporation has decided to replace an existing asset with a newer model. Two years ago, the existing asset originally cost $30,000 and was being depreciated under MACRS using a five-year recovery period. The existing asset can be sold for $25,000. The new asset will cost $75,000 and will also be depreciated under MACRS using a five-year recovery period. If the assumed tax rate is 40 percent on ordinary income and capital gains, the initial investment is A. $42,000 B. $52,440 C. $54,240 D. $50,000 · A $60,000 outlay for a new machine with a usable life of 15 years is called A. capital expenditure B. operating expenditure C. replacement expenditure D. None of the above · A $60,000 outlay for a new machine with a usable life of 15 years is called A. capital expenditure B. operating expenditure C. replacement expenditure D. None of the above · A bank lends a firm $500,000 for one year at 8 percent and requires compensating balances of 10 percent of the face value of the loan. The effective annual interest rate associated with this loan is A. 8.9 percent B. 8 percent C. 7.2 percent D. 7.0 percent · Most firms employ ________ financing strategy. A. an aggressive B. a conservative C. a trade-off D. a seasonal · The theoretical basis from which the concept of risk-adjusted discount rates is derived is A. the Gordon model

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Question

FIN 504

· ________ are obligations of the U.S. Treasury with common maturities of one to seven years and that are generally issued in minimum denominations of $5,000.

A.

Treasury notes

B.

Treasury bills

C.

Federal agency issues

D.

Banker’s acceptances

· The firm’s financing requirements can be separated into

A.

current liabilities and long-term funds

B.

current assets and fixed assets

C.

current liabilities and long-term debt

D.

seasonal and permanent

· Debt is generally the least expensive source of capital. This is primarily due to

A.

fixed interest payments

B.

its position in the priority of claims on assets and earnings in the event of liquidation

C.

the tax deductibility of interest payments

D.

the secured nature of a debt obliga

· The capital impairment restrictions are established to

A.

reduce dividends equal to or below the current earnings level

B.

constrain the firm to paying dividends which do not require additional borrowing

  • c

protect the shareholder

D

provide a sufficient base to protect creditors’ claims

· The portion of a firm’s current assets financed with long-term funds may be called

A.

working capital

B.

accounts receivable

C.

net working capital

D.

Inventory

· Earnings before interest and taxes (EBIT) is a descriptive label for

A.

operating profits

B.

net profits before taxes

C.

earnings per share

D.

gross profits

· At a firm’s quarterly dividend meeting held on December 5, the directors declared a $1.50 per share cash dividend to be paid to the holders of record on Monday, January 1. Before the dividend was declared, the firm’s accumulated retained earnings balance and cash balance were $1,280,000 and $30,000 respectively. The firm has 10,000 shares of common stock outstanding. On January 2, the cash, dividends payable, and retained earnings accounts had balances of

A.

$15,000, $0, and $1,265,000, respectively

B.

$30,000, $15,000, and $1,280,000, respectively

C.

$30,000, $0, and $1,265,000, respectively

D.

$15,000, $0, and $1,280,000, respectively

· If a firm has a limited capital budget and too many good capital projects to fund them all, it is said to be facing the problem of

A.

constrained capital

B.

wealth optimization

C.

capital rationing

D.

profitability

· ________ analysis is a technique used to assess the returns associated with various cost structures and levels of sales.

A.

Time-series

B.

Marginal

C.

Breakeven

D.

Ratio

· Systematic risk is also referred to as

A.

diversifiable risk

B.

economic risk

C.

nondiversifiable risk

D. Not Relevant

· Net working capital is defined as

A.

a ratio measure of liquidity best used in cross-sectional analysis

B.

the portion of the firm’s assets financed with short-term funds

C.

current liabilities minus current assets

D.

current assets minus current liabilities

________ is a series of equal annual cash flows.

A.

A mixed stream

B.

A conventional

C.

A non-conventional

D.

An annuity

· A corporation is selling an existing asset for $21,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent on ordinary income and capital gains, the tax effect of this transaction is

A.

$0 tax liability

B.

$7,560 tax liability

C.

$4,400 tax liability

D.

$7,720 tax liability

· The ________ is the rate of return a firm must earn on its investments in projects in order to maintain the market value of its stock.

A.

net present value

B.

cost of capital

C.

internal rate of return

D.

gross profit margin

· A behavioral approach that evaluates the impact on the firm’s return of simultaneous changes in a number of project variables is called

A.

sensitivity analysis

B.

scenario analysis

C.

simulation analysis

D.

All of the above

· The objective of ________ is to select the group of projects that provides the highest overall net present value and does not require more dollars than are budgeted.

A.

capital rationing

B.

scenario analysis

C.

certainty equivalents

D.

sensitivity analysis

· A corporation has decided to replace an existing asset with a newer model. Two years ago, the existing asset originally cost $30,000 and was being depreciated under MACRS using a five-year recovery period. The existing asset can be sold for $25,000. The new asset will cost $75,000 and will also be depreciated under MACRS using a five-year recovery period. If the assumed tax rate is 40 percent on ordinary income and capital gains, the initial investment is

A.

$42,000

B.

$52,440

C.

$54,240

D.

$50,000

· A $60,000 outlay for a new machine with a usable life of 15 years is called

A.

capital expenditure

B.

operating expenditure

C.

replacement expenditure

D.

None of the above

· A $60,000 outlay for a new machine with a usable life of 15 years is called

A.

capital expenditure

B.

operating expenditure

C.

replacement expenditure

D.

None of the above

· A bank lends a firm $500,000 for one year at 8 percent and requires compensating balances of 10 percent of the face value of the loan. The effective annual interest rate associated with this loan is

A.

8.9 percent

B.

8 percent

C.

7.2 percent

D.

7.0 percent

· Most firms employ ________ financing strategy.

A.

an aggressive

B.

a conservative

C.

a trade-off

D.

a seasonal

· The theoretical basis from which the concept of risk-adjusted discount rates is derived is

A.

the Gordon model

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