Question
13. Minimum Rate of Return that a firm must earn in order to satisfy its investors is also known as: A. Average Return on Investment,
13. Minimum Rate of Return that a firm must earn in order to satisfy its investors is also known as:
A. Average Return on Investment,
B. Weighted Average Cost of Capital
C. Net Profit Ratio
D. Average Cost of borrowing.
14. If the net present value of a project is zero based on a discount rate of 20 %, then the internalrate of return is:
A. Equal to 20 %.
B. Less than 20 %.
C. Greater than 20%.
D. cannot be determined
15. Hop Company has $15,000 in cash, $5,000 in marketable securities, $20,000 in accounts receivable, $20,000 in inventories, and $30,000 in current liabilities. The company's current assets consist of cash, marketable securities, accounts receivable, and inventory. The company's acid-test ratio is:
A. 1.50B. 2.00
C. 1.90D. 1.33
16. Last year JJ Company had a net income of $500,000, income tax expense of $150,000, andinterest expense of $100,000. The company's times interest earned was closest to:
A. 5.00B. 6.00C. 6.50
D. 7.50E. None
17. Brass Company's debt-to-equity ratio is 0.8. Total liabilities total $300,000. Brass Company'stotal assets must be:
A. $675,000B. $375,000
C. $450,000D. $550,000
18. The investor is considering investing in a Br. 500,000, 10%, 10 years term bonds of ABC Corporation. If the market interest rate is 10%, what is the value of the bond if interest is paid annually?
A. Br. 583,500B. Br. 450,000
C. Br. 500,000D. None
19. The investor is considering investing in a Br. 500,000, 14%, 5 years term bonds of XYZ Corporation. The market interest rate is 12%. What is the value of the bond if interest is paid semiannually?
A. Br.500, 000B. Br.536, 800
C. Br.530, 000D. None
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