1. Neal's Nails has an 11% return on assets and a 30% dividend payout ratio. What is the internal growth rate?

A. 8.34% B. 7.70% C. 8.46% D. 11.99% E. 7.11%

2. A business created as a distinct legal entity composed of one or more individuals or entities is called a:

A. general partnership. B. corporation. C. limited partnership. D. unlimited liability company. E. sole proprietorship.

3. Accounting profits and cash flows are:

A. generally the same since they reflect current laws and accounting standards.

B. generally the same since accounting profits reflect when the cash flows are received.

C. generally not the same since GAAP allows for revenue recognition separate from the receipt of cash flows.

D. generally not the same because cash inflows occur before revenue recognition.

E. Both c and d.

4. A firm has 5,000 shares of stock outstanding, sales of $6,000, net income of $800, a price-ratio of 10, and a book value per share of $.50. What is the market-to-book ratio?

A. 1.6 B. 3.6 C. 3.2 D. 2.4 E. 3.0

5.The person generally directly responsible for overseeing the cash and credit functions, financial planning, and capital expenditures is the:

A. controller. B. chairman of the board. C. chief operations officer. D. director. E. treasurer.

6. Financial managers should strive to maximize the current value per share of the existing stock because:

A. the current stockholders are the owners of the corporation.

B. the managers often receive shares of stock as part of their compensation.

C. doing so guarantees the company will grow in size at the maximum possible rate.

D. doing so means the firm is growing in size faster than its competitors. E. doing so increases the salaries of all the employees.