1.Which one of these will decrease a firm's cash balance?

A. A decrease in inventory B. An increase in accounts payable C. An increase in common stock D. An increase in accounts receivable

2. What is the ROA of a firm with $175,000 in average receivables, which represents 60 days sales, average assets of $750,000, and a profit margin of 9%?

A. 12.77% B. 9.00% C. 10.95% D. 16.70%

3. Jensen Products, Inc. is the leading manufacturer of grills, barbeques and accessories and its lead- ing grill, the Burner 3000, of which more than 2,000,000 have been sold has been recalled by the FTC for fire danger. The recall will cost Jensen at least $400,000,000. This is an example of which type of risk?

A. Nonsystematic risk. B. Systematic risk. C. Market risk.??? D. Volatility risk.

4. Ten-year Ford Motor Co semiannual payment bonds with a 6% coupon were issued on 1/1/13 and are callable on 1/1/17 and are trading at 1,030. What is the yield to the call date?

A. 2.89%. B. 4.18%. C. 4.42%. D. 5.79%. 5. A bond has a coupon rate of 6%, pays interest semiannually, sells for $960, and matures in 3 years. What is its yield to maturity? A. 4.78% B. 5.48% C. 3.75% D. 7.51%

6. Two years ago ACME bonds were issued at par with 10 years until maturity and a 7% annual cou- pon. If interest rates for that grade of bond are currently 6.25%, what will be the market price of these bonds?

A. $1,046.12 B. $928.84 C. $987.50 D. $1,000.00

7. Wilson Corporation has earnings per share of $3.98 and dividends per share of $.35. What is the firm's sustainable rate of growth if its return on assets is 14.6% and its return on equity is 18.2%?

A. 2.14% B. 1.71% C. 16.6% D. 1.6%

8. What dividend yield would be reported in two years in the financial press for a stock that currently pays a $1.50 dividend per quarter, has a return on equity of 18% and earnings per share of $7.75 and a projected stock price in two years of $40?

A. 15%. B. 18% C. 16.2% D. 4%.

9. A stock's P/E ratio is 15.5 at a time when net earnings are $60 million, there are 20 million shares of common stock outstanding and the dividend payout ratio is 40%, what is the stock's current price?

A. $24.30 B. $46.50 C. $22.22 D. $40.50

10. What is the maximum that should be invested in a project at time zero if the inflows are esti- mated at $55,000 annually for 3 years, and the cost of capital is 9%?

A. $139,221 B. $109,200 C. $126,564 D. $130,800

11. What is the maximum amount a firm should pay for a project that will return $15,000 annually for 5 years if the opportunity cost is 10%?

A. $24,157 B. $56,861 C. $62,540 D. $48,021

12. What is the IRR for a project that costs $100,000 and provides annual cash inflows of $33,000 for 5 years?

A. 19.90% B. 16.67% C. 19.40% D. 22.09%

13. Jensen Corporation has the following data for 2021, Sales of $50 million, Net Profit Margin of 10%, annual Depreciation of $1.5 million, projected Capital Expenditures of $1 million, projected Working Capital investment of $1.1 million and an inflation rate of 3%? The firm has no debt, and you are an analyst preparing a five-year free cash flow proforma and the free cash flow in 2021 of the proforma is?

A. $4.532 million. B. $4.40 million. C. $ 2.90 million. D. $3.07 million.

14. Wilson Corporation is acquiring a new punching machine for $2.7 million that will generate quarterly cash flows of $450,000 in year 1, $375,000 in year 2 and $240,000 in years 3 to 5. What is the annual IRR on the investment?

A. -17.80% B. 17.80% C. 39.38% D. 43.28%

15. What is the amount of the operating cash flow for a firm with $500,000 profit before tax, $100,000 depreciation expense, and a 35% marginal tax rate?

A. $260,000 B. $325,000 C. $360,000 D. $425,000

16. Johnson Corporation paid a quarterly dividend of $1/sh. last year, has an expected return on its stock of 15% and a dividend growth rate of 5%. What is the projected price per share of the stock in two years?

A. $40.00. B. $44.10. C. $10.00. D. $11.02.

17. Which one of the following security classes has the lowest standard deviation of returns?

A. Common stocks B. Long-term Treasury bonds C. Treasury bills D. Corporate bonds

18. A common stock was held for 2 years during which time total dividends of $20 were paid. The stock was sold for $100. What was the purchase price of the stock if the total rate of return for the period was 32%?

A. $61.60 B. $64.80 C. $88.00 D. $90.91