24

If paid in capital for Firm A is $10 million,retained earnings are $4 million, and net income is $2 million, what is Firm A's stockholder's Equity?

1. A.$12 million
2. B.$14 million
3. C.$16 million
4. D.$18 million

2 points

QUESTION 25

If total assets are $10 million,current assets are $6,000,000, and current liabilities are $4,000,000,what is the net working capital?

1. A.$1 million
2. B.$2 million
3. C.$4 million
4. D.$6 million

2 points

QUESTION 26

A decline in the value of tangible assets during the production process is known as:

1. A.depreciation
2. B.annulment
3. C.amortization
4. D.retained earnings

2 points

QUESTION 27

If Current Assets equal $800,000, Current liabilities equal $400,000, and inventories equal $100,000, what is the current ratio?

1. A.1.25
2. B.1.50
3. C.1.75
4. D.2.00

2 points

QUESTION 28

IfCurrentAssets equal $900,000, Current liabilities equal $400,000, andinventories equal $300,000, what is the quick ratio?

1. A.1.00
2. B.1.25
3. C.1.50
4. D.1.75

2 points

QUESTION 29

If the sales are $10million,total assets are $20 million, and inventories are $5 million, what is the inventory turnover ratio?

1. A.2
2. B.5
3. C.10
4. D.15

2 points

QUESTION 30

If sales are $1,000,EBIT is $250,and interest charges are $50,what is the times-interest-earned ratio?

1. A.2
2. B.3
3. C.4
4. D.5

2 points

QUESTION 31

If EBIT is $1.3 million,net income is $750,000,and sales are $18 million,what is the operatingmargin?

1. A.4.17%
2. B.9.32%
3. C.12.56%
4. D.18.12%

2 points

QUESTION 32

If the price of the stock is $20,dividends per share are $4.00and EPS are $2.00,what is the P/E ratio?

1. A.2
2. B.5
3. C.10
4. D.12

2 points

QUESTION 33

Mr. and Mrs. Jones buy a house for $485,000.If the house appreciates at 5% annually, what would be the value of the house in 15 years?

1. A.$567.234
2. B.$679.241
3. C.$867,565
4. D.$1.008.280

2 points

QUESTION 34

If Susan saves $5,000 per year for 40 years and earns 7% on his investment, how much money will he have after 40 years?

1. $625,872
2. $785,456
3. $998,176
4. $1,287,456

2 points

QUESTION 35

Mr. and Mrs. Davis would like to have $150,000 to send their daughter to college in 15years.They expect to earn 7% annually on their investment.What amount do they need to have today so that they can reach their financial goal of having $150,000 in 15years?

1. A.$54,367
2. B.$62,186
3. C.$68,984
4. D.$76,568

2 points

QUESTION 36

If XYZ corp.has annual dividend yield of 3.0%%and and provided a total return of 8.5%,what is the capital appreciation for the past year?

1. A.5.5%
2. B.7.5%
3. C.9.0%
4. D.11.5%

ABC Corp.has estimated value of next year's dividends of $4.00 and constant dividend growth rate of 5%.If the company's expected rate of return is 10%,what is the expectedprice of ABC's shares according to the discounteddividend model?

1. A.$20
2. B.$40
3. C.$60
4. D.$80

2 points

QUESTION 39

The amount a company can write off for tangible assets such as building and machinery is known as:

1. A.amortization
2. B.depreciation
3. C.capital expenditure
4. D.working capital

2 points

QUESTION 40

The dailymarket price of a stock is determined by:

1. A.marginal investors
2. B.company analysts
3. C.company executives
4. D.board of directors

2 points

QUESTION 41

A bond currently trades at $1,085.00and has a face value of $1,000.If the annualyield is 8% and the bond has 20 years to maturity, what is its coupon rate?

1. A.7.72%
2. B.8.24%
3. C.8.86%
4. D.9.38%

2 points

QUESTION 42

A bond maturing in 10 years at a par value of $1,000has a coupon rate of 5.5%and current yield of 7.5%.What is the price of the bond?

1. A.$861.04
2. B.$924.78
3. C.$982.45
4. D.$1,015.68

2 points

QUESTION 43

The slopeof the yield curve depends primarily on expectations about:

1. A.future political elections
2. B.future stock market performance
3. C.future corporate earnings
4. D.future inflation

2 points

QUESTION 44

If the interest rates on the 6-month T-bills are 3.25%and on the 10-year T-bonds are 2.75%,the result would be:

1. A.normal yield curve
2. B.upward-sloping yield curve
3. C.flat yield curve
4. D.inverted yield curve

2 points

QUESTION 45

The risk that a decline in interest rates will lead to a decline in income from a portfolio is known as:

1. A.default risk
2. B.reinvestment risk
3. C.credit risk
4. D.business risk

2 points

QUESTION 46

Many banks and other institutional investors are often required to invest in:

1. A.investment-grade bonds
2. B.high-yield bonds
3. C.lower quality
4. D.junk bonds