17. Which of the following is NOT considered to be a factor that affects the industry in which a firm operates? a. technology b. credit conditions c. interest rates d. regulations

23. Management seeks to identify individuals who possess capability in these four areas: a. business intelligence, marketing intelligence, strategic intelligence, and people intelligence b. business intelligence, organizational intelligence, strategic intelligence, and people intelligence c. business intelligence, marketing intelligence, organizational intelligence, and people intelligence d. business intelligence, emotional intelligence, strategic intelligence, and people intelligence.

28. Stock that is repurchased by the issuing company is called ______. a. paid in capital b. retained capital c. treasury stock d. par value stock

29. Which is NOT an example of current liabilities? a. notes payable b. accounts receivable c. current portion of long-term debt d. taxes payable

31. Cost of sales is calculated by ______. a. adding the cost of inventory on hand at the start of the period minus the cost of any purchases of materials during the year and then subtract the cost of ending inventory b. adding the cost of the inventory at the start of the period plus the cost of any purchases of materials during the year and then subtract the cost of the ending inventory c. adding the cost of the inventory on hand at the start of the period plus the cost of any purchases of materials during the year and then add the cost of the ending inventory d. adding the cost of the inventory on hand at the end of the period plus the cost of any purchases of materials during the year and then subtract the costs of the beginning inventory

33. Which of the following does NOT represent cash outflows to the firm? a. taxes b. interest payments c. dividends d. depreciation

35. Which of the following is NOT a source of cash from financing activities? a. repayment of long-term debt b. proceeds from issuance of common stock c. proceeds for long-term borrowing d. both a and c

36. Time series ratio analysis of your own firm over time is an example of: a. external assessment b. narcissistic assessment c. cross sectional assessment d. internal assessment

37. Modern Comics Inc., has sales of $2,500,000, net income of $50,000, assets worth $1,700,000, and total common stockholder equity of $1,500,000. The ROE for the firm is ______. a. 68.00% b. 60.00% c. 2.94% d. 3.33%

38. The firm's ________ indicates the degree to which effective use of borrowing contributed to the firm's ROE. a. asset turnover b. financial leverage c. profit margin d. return on assets

39. A firm's age of accounts receivable ______. a. measures the average time between credit-based sales and the collection of payments for those sales b. is likely to be greater for firms within the same industry with more generous credit terms c. is in part a function of the type of industry in which the firm operates d. all of the above

40. The ________ ratio measures the extent to which a firm is able to cover its short-term obligations (usually defined as obligations due within the next year) with its short-term assets. a. ROE b. current c. inventory turnover d. working capital

42. Which of the following is NOT a potential source of cash for a firm? a. repayment of a short-term loan b. an increase in equity c. an increase in long-term debt d. a decrease in property, plant, or equipment

43. Which of the following is an example of a type of inventory management activity? a. JIT or just-in-time inventory control system b. RFI or radio frequency identification systems c. EOQ or economic order quantity formulas d. all of the above

44. Which of the following trade credit terms for goods and services purchased would be preferred by a firm? a. 2/10 net 30 b. 3/10 net 45 c. 3/15 net 45 d. Unless we know the firm's cost of borrowing we cannot determine which set of terms is preferred.

45. When constructing pro forma income statements which of the following is the last item to be estimated? a. sales b. the change in retained earnings c. depreciation expense d. taxes

46. Cantanna Inc., is developing a pro forma income statement for the coming year. The chief financial officer estimates that fixed assets are $70,000,000 and that sales will be $300,000,000. If depreciation is historically 20% of fixed assets, what is the expected amount of depreciation for the upcoming year (in dollars)? a. $14,000,000 b. $20,000,000 c. $60,000,000 d. this figure cannot be reasonably estimated

47. When developing a pro forma balance sheet which of the following is typically the LAST item to be estimated? a. inventory b. total assets c. external financing d. cash

48. The ________ is the critical connection between the pro forma income statement and the pro forma balance sheet. a. change in net working capital b. change in cost of goods sold c. change in dividends d. change in retained earnings

49. Managers often begin with an estimate of ________ when beginning to develop pro forma financial statements. a. net income b. sales c. assets d. equity

50. Dynamo Engines Inc., has an ROA of 10%, a profit margin of 6%, an assets to equity ratio of 1.30, and a retention ratio of 0.70. What is the firm's sustainable growth rate? a. 18.57% b. 9.10% c. 5.46% d. 0.55%

51. The ________ is a two-edged sword in that as its value increases the ROE should increase, but the risk to shareholders also increases. a. profit margin b. ROA c. leverage ratio d. asset turnover ratio

52. Consider the equation for present value. If you wished to increase the present value of a future amount by changing only one variable, which of the following actions should you take? a. increase the time period b. decrease the future value c. decrease the interest rate d. this statement cannot be answered with the information provided

53. Which choice has a greater present value if we assume a required rate of return of 10%? 1: A lump sum cash flow today of $248.69 2: $100 cash flows occurring one, two, and three years from today 3: a single cash flow of $331 three years from today. a. Choice 1 b. Choice 2 c. Choice 3 d. The choices all have equal present values at a discount rate of 10%.

54. Your parents paid $1,000 for a college fund bond when you were born. Today is your 20th birthday and you are ready to cash the bond which has grown to a value of $3,361.85. What was the average annual rate of return on your college fund bond? a. 5.50% b. 6.25% c. 6.73% d. there is not enough information to answer this question

55. Michael received a professional baseball contract paying $7,000,000 per year for 5 years, Bert received a two-year contract for $16,000,000 per year. For purposes of calculations, treat these contracts as ordinary annuities. Who's contract has a greater present value if we assume a discount rate of 6%? a. Bert = $29,334,283 b. Michael = $29,486,547 c. Bert = $39,459651 d. Michael = $39, 743,196

56. Your university is running a special offer on tuition. This year's tuition cost is $18,000. Next year's tuition cost is scheduled to be $19,080. The university offers to discount next year's tuition at a rate of 6% if you agree to pay both year's tuition in full today. How much is the total tuition bill today if you take the offer? a. $34,981.13 b. $36,000.00 c. $37,080.00 d. $38,160.00