100% confident answers for your comparison

1. The inventory decision model provides which type of information:

a.optimal total inventory
b.optimal safety stock
c.optimal order size
d.optimal carrying cost per unit

2.Investors and financial analysts wanting to evaluate the operating efficiency of a firms managers would probably look primarily at the firms____ratios.
a.debt utilization
b.liquidity
c.asset utilization
d.profitibility

3.If the companys accounts receivable turnover is increasing, the average collection period:
a.is going up slightly
b.is going down
c.could be moving in either direction
d.is going up by significant amount

4.The rapid rate of growth in sales may require:
a.higher dividend payments to shareholders
b.increased borrowing by the firm to support the sales increase
c.the firm to be more lenient with credit customers
d.sales forecasts to be made less frequently

5. Sharon Smith will receive $1million in 50yrs. The discount rate is 14%.As an alternative, she can receive $2,000 today.Which should she choose?
a.$1million in 50yrs
b.$2,000 today
c.she should be indifferent
d.need more information to answer

6.Hedging:
a.is a way to protect your accounts receivable position
b.increases risk
c.is a legal agreement to buy or sell a financial futures contract
d.can be carried out with futures contract

8.Modos company has deposited $2,000 in checks received from customers.It has written $1,400 in checks to its suppliers. The initial bank and book balance was $400.If$1,600 of its customers checks have been cleared but only $600 of its own checks have cleared,calculate its float.
a.$200
b.$400
c.$300
d.$700

9.We expect that we can receive annual incremental income after taxes of $15,000 which inlcludes and adjustment for uncollectible accounts.What is the maximum commitment to A/R we should be willing to assume if our firms minimum required after-tax return is 12%?
a.$18,000
b.$125,000
c.$168,000
d.$180,000

10. A firm has a debt to equity ratio of 50%, debt of $300,000, and net income of $90,000.What is the return on equity?
a.60%
b.15%
c.30%
d.45%

11.As the compounding rate becomes lower and lower, the future value of inflows approaches:
a.0
b.the present value of the inflows
c.infinity
d.need more information to answer

12.If you were to put $1,000 in the bank at 6% interest each year for the next ten yrs,which table would you use to find the ending balance in your account?
a.Present value of $1
b.future value of $1
c.present value of an annuity of $1
d.future value of an annuity of $1

13. A bond that has a yeild to maturity greater than its coupon rate will sell for a price:
a.below par
b.at par
c.above par
d.that if equal to the face value of all interest payments.

 
14.A home buyer signed a 20yr, 8% mortgage for $72,500.Given the following information, how much should the annual loan payments be?
Present value of $1 PVif=.215
Future value of $1 FVif=4.661
Present value of annuity PVifa=9.818
Future value of annuity FVifa=45.762
a.$1,584
b.$7,384
c.$15,555
d.$15,588

15. A ten yr bond, with par value equals $1000, pays 10% annually.If similar bond are currently yeilding 6% annually, what is the market value of the bond? Use semi-annual analysis.
a.$1000.00
b.$1127.50
c.$1297.85
d.$2549.85

16.Sydney saved $50,000 during her first year of work after college and plans to invest it for her retirement in 40yrs. How much will she have available for retirement if she can make 8% on her investment?
a.$596,250
b.$12,953,000
c.$2,345,100
d.$1,086,250

17.Jeff believes he will need $60,000 annual income during retirement.If he can receive a 5% return during retirement and believes he will live 30 years after retirement, how much does he need to save by the time he retires?
a.$1,029,540
b.$3,986,340
c.$922,320
d.$259,320

18.If Gary makes a deposit of $1,500 at the end of each quarter for 5yrs, how much will he have at the end of 5yrs assuming a 12% annual return and quaterly compounding?
a.$40,305
b.$30,000
c.$108,078
d.$161,220

19. Firms that successfully increase their rates of inventory turnover will, among other things:
a.be able to reduce their borrowing needs
b.be able to reduce their dividend payments to stockholders
c.find it more difficult to be given credit by their resource suppliers
d.have a greater need for high balances in their cash accounts

20. What is the future value of a $1,000 investment today at 8% annual interest compounded semiannually for 5yrs?
a.$1,469
b.$1,480
c.$1,520
d.$1,555