191. Match the appropriate Internal Rate of Return (IRR) to each set of cash flows.

- A. B. C. D. E.	CF0: -304 CF1: 13 CF2: 24 CF3: 19 CF4: 211 CF5: 137
- A. B. C. D. E.	CF0: -332 CF1: 36 CF2: 27 CF3: 28 CF4: 127 CF5: 204
- A. B. C. D. E.	CF0: -316 CF1: 38 CF2: 28 CF3: 16 CF4: 162 CF5: 134
- A. B. C. D. E.	CF0: -378 CF1: 29 CF2: 40 CF3: 25 CF4: 232 CF5: 207
- A. B. C. D. E.	CF0: -294 CF1: 38 CF2: 36 CF3: 10 CF4: 205 CF5: 142

A.7.29%

B.9.03%

C.4.8% D.6.21% E.10.6%

221. Project X has an expected cash outflow at time zero of 1,942 and has the following projected cash inflows over the next six years:

Year	Amount
1	197
2	283
3	341
4	457
5	557
6	684

The company's weighted average cost of capital is 14.2%. What is the net present value of this project? (Show your answer to the nearest dollar, and if negative, include a minus sign, e.g. -123 or 123)

231. Match up the payback period with the cash flows.

- A. B. C. D. E.	CF0: -1360 CF1: 560 CF2: 330 CF3: 820 CF4: 200
- A. B. C. D. E.	CF0: -530 CF1: 500 CF2: 100 CF3: 970 CF4: 130
- A. B. C. D. E.	CF0: -900 CF1: 680 CF2: 110 CF3: 950 CF4: 180
- A. B. C. D. E.	CF0: -1675 CF1: 580 CF2: 240 CF3: 700 CF4: 180
- A. B. C. D. E.	CF0: -1230 CF1: 590 CF2: 240 CF3: 550 CF4: 410

A.About 2.73 years

B.About 1.30 years

C.About 2.12 years

D.About 3.86 years

E.About 2.57 years

241. Project A would require an initial outlay of $43,000 and is expected to generate positive cash flows in years one through six of $17,312; $12,542; $17,789; $13,729; $13,233; and $13,208. Using a discount rate of 8.7%, what is the NPV of this project? If the answer is negative, include the negative sign, and show the answer to the nearest dollar.

251.

A firm wants to strengthen its financial position. Which of the following actions would increase its current ratio?

	a.	Borrow using short-term debt and use the proceeds to repay debt that has a maturity of more than one year.
	b.	Issue new stock and then use some of the proceeds to purchase additional inventory and hold the remainder as cash.
	c.	Use cash to increase inventory holdings.
	d.	Use cash to repurchase some of the companys own stock.
	e.	Reduce the companys days sales outstanding to the industry average and use the resulting cash savings to purchase plant and equipment.

261.

1. XYZ Company has inventory equal to $244,000, a current ratio of 3.2 and a quick ratio of 2.4. What is the level of the firm s current liabilities?

   		a. 333,333
   		b. 170,000
   		c. 305,000
   		d. 225,000

271. Companies can issue different classes of common stock. Which of the following statements concerning stock classes is most correct?

		All common stock, regardless of class, must have the same dividend rights and payments.
		Common stock can be issued without any voting rights.
		Common stocks fall into one of three classes: A, B or C.
		Most firms have several classes of common stock outstanding.

281.

You are evaluating two annuities that pay $1,000 per year. Annuity A is an "ordinary annuity" and Annuity B is an "annuity due." The difference between an "ordinary annuity" and an "annuity due" is that

	a.	The payments on the orindary annuity will begin immediately while the payments on the annuity due begin a year from now.
	b.	The payments on the annuity due will begin immediately while the payments on the "ordinary annuity" begin a month from now.
	c.	The payments on the annuity due will begin immediately while the payments on the ordinary annuity begin a year from now.
	d.	The annuity payments on the ordinary annuity are guaranteed but the annuity payments for the annuity due may be different each year, depending on the market rate of interest.
	e.	The payments on the orindary annuity will begin immediately while the payments on the annuity due begin a month from now.

291.

1. Bond ratings such as AAA and B++ are an indicator of

   		The collateral status of the bond.
   		The par value of the bond.
   		The default risk of the bond.
   		The seniority of the bond.

301.

Which of the following statements is CORRECT?

	a.	The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects.
	b.	The net present value method (NPV) is generally regarded by academics as being the best single method for evaluating capital budgeting projects.
	c.	The modified internal rate of return method (MIRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects.
	d.	The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects.
	e.	The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects.

311.

A sudden unanticipated decrease in the market rate of interest triggered by unexpected inflation

		Would lower the coupon rate on outstanding bonds.
		Would decrease the price of bonds in the secondary markets.
		Would increase the price of bonds in the secondary market.
		Would have no effect on the price of, but would alter the cash flows from those bonds.

321.

Interest on the 30 year U.S. Treasury bond rose from 5.66 percent to 5.76 percent, an increase of _______.

		10 basis points.
		100 basis points.
		1/10th of a basis point.
		1 basis point.