Heres some info for a company:

Total assets = $50,000,000 Fixed assets = $45,000,000 Net working capital = $1,000,000

Profit margin = 5% Sales = $40,000,000

10

. What is the companys current ratio?

A. 1.0

D. 2.0

B. 1.25

E. 2.5

C. 1.5

Heres some info for a company:

Total assets = $50,000,000

Debt ratio = .40

Net income = $3,600,000

Sales = $120,000,000

11. What is the companys return on equity?

A. 12%

D. 20%

B. 15%

E. 24%

C. 18%

12

. If you wanted to compute the four ratios listed below, how many entries from the balance sheet would you need? If an entry occurs more than once, count it as many times as it occurs. If it is helpful you can pretend that each ratio is for a different company so no two entries would be the same number and therefore would have to be counted as many times as it occurs.

Profit margin

Leverage

Receivables turnover

ROE

A. 2

B. 3

C. 4

D. 5

E. 6

Heres some info for a company:

Total assets = $50,000,000 Fixed assets = $44,000,000 Current ratio = 2

Profit margin = 5% Sales = $40,000,000

Stockholders equity = $10,000,000

13

. What is the companys net working capital?

A. $1 million

D. $5 million

B. $2.5 million

E. $7.5 million

C. $3 million

14

. Total asset turnover requires information from the _________; the leverage ratio requires information from the _________.

A. income statement and balance sheet; income statement and balance sheet

B.income statement only; income statement and balance sheet

C. balance sheet only; income statement and balance sheet

D. income statement and balance sheet; balance sheet only

E. income statement and balance sheet; income statement only

15.

A zero coupon bond has a par value of $10,000 and a current price of $7,400. If the bond has 8 years to maturity, what is its yield to maturity?

A. 2.6%

B. 2. 9%

C. 3.2%

D. 3.6%

E. 3.8%

16.

A 20-year bond with an 8% coupon rate (paid semi-annually) and $1000 par value for $1080. What is the effective annual yield?

A. 7.0%

B. 7. 2%

C. 7.4%

D. 7.6%

E. 7.8%

17.

What is the price of a $1000 par value bond that has 16 years to maturity if it has an 8% annual coupon rate paid semiannually and the yield to maturity is 7%?

A. $1084

B. $1095

C. $1099

D. $1157

E. $1177

18

. A preferred stock investment will pay you an annual $9 dividend on the same day each year. The dividends will begin 12 years from today and go on forever. How much is this investment worth today if the required rate is 10%?

A. $27.77

B. $28.68

C. $30.19

D. $31.54 E. $32.48

19

. A zero coupon bond has a par value of $10,000 and a current price of $7,000. If the bond has 8 years to maturity, what is its after-tax yield to maturity for an investor paying 25% taxes?

A. 3.4%

B. 3.9%

C. 4.2%

D. 4.6%

E. 4.8%

20

. A company had net income of $300,000 after paying taxes at 34 percent. The firm had revenues of $2,500,000. Their interest expense for the year was $150,000 while their operating expenses were $200,000. What was the firms approximate cost of goods sold?

A. $1.1 million B. $1.3 million C. $1.5 million

D. $1.7 million E. $1.9 million

21

. From the previous problem, if leverage is 2, the current ratio is 1.2 and total asset turnover is 1.5, what is the company

s ROE?

A. 9% B. 25% C. 30%

D. 36% E. 43.2%

22

. You anticipate that a mature company will only be able to pay its current dividend of $4 for 10 more years. If your required return for this company is 8%, what is the value of the stock today?

A. $25.42 B. $26.33 C. $26.84

D. $27.80 E. $28.86