Hi Minx,

I don't know what the issue was with them, I've taken them out of the word doc and just enclosed them below however it has removed my ABC.. formatting and replaced them with bullets.

1.

If the Hunter Corp. has an ROE of 19 and a payout ratio of 27 percent, what is its sustainable growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Sustainable growth rate %

2.

The most recent financial statements for Williamson, Inc., are shown here (assuming no income taxes):

Income Statement		Balance Sheet
Sales	$	6,500		Assets	$	23,500		Debt	$	9,500
Costs		4,610						Equity		14,000
Net income	$	1,890		Total	$	23,500		Total	$	23,500

Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid.

Next years sales are projected to be $7,150.

What is the external financing needed?

(Do not round intermediate calculations and round your answer to the

nearest whole number, e.g., 32.)

External financing needed

$

3.

The return on equity can be calculated as:

Profit margin ROA.ROA Debt-equity ratio.ROA (Net income / Total assets).ROA Equity multiplier.Profit margin ROA Total asset turnover.ignores the normal restraints encountered by a firm.ensures internal consistency among the firms various goals.eliminates the need to plan more than one year in advance.is based on the internal rate of growth.reduces the necessity of daily management oversight of the business operations

5.

One of the primary weaknesses of many financial planning models is that they:

• are iterative in nature.
• ignore the goals and objectives of senior management.
• ignore the size, risk, and timing of cash flows.
• ignore cash payouts to stockholders.
• rely too much on financial relationships and too little on accounting relationships.

6.

The sustainable growth rate will be equivalent to the internal growth rate when, and only when,:

• the growth rate is positive.
• a firm has a debt-equity ratio equal to 1.
• the plowback ratio is positive but less than 1.
• the retention ratio is equal to 1.
• a firm has no debt.

7.

In the financial planning model, the external financing needed (EFN) as shown on a pro forma balance sheet is equal to the changes in assets:

• minus the changes in both liabilities and equity.
• minus the changes in liabilities.
• minus the change in retained earnings.
• plus the changes in liabilities minus the changes in equity.
• plus the changes in both liabilities and equity.

8.

Which one of the following depicts a correct relationship?

• ROA = ROE (1 + Debt-equity ratio)
• Equity multiplier = 1 Debt-equity ratio
• Dividend payout ratio = 1 Retention ratio
• Total asset turnover = 1 + Capital intensity ratio
• ROE = 1 ROA

9.

The extended version of the percentage of sales method:

• is based on a capital intensity ratio of 1.0.
• separates accounts that vary with sales from those that do not vary with sales.
• assumes that all net income will be paid out in dividends to stockholders.
• requires that all financial statement accounts change at the same rate.
• assumes that all net income will be retained by the firm and offset by a reduction in debt.

10.

The external funds needed (EFN) equation projects the addition to retained earnings as:

• PM Projected sales.
• PM Sales.
• PM Projected sales (1 - d).
• Projected sales (1 - d).
• PM Sales (1 - d).

11.

The maximum rate at which a firm can grow while maintaining a constant debt-equity ratio is best defined by its:

• internal rate of growth.
• sustainable rate of growth.
• rate of return on equity.
• average historical rate of growth.
• rate of return on assets.

12.

Which account is least apt to vary directly with sales?

• accounts receivable
• notes payable
• inventory
• cost of goods sold
• accounts payable

13.

The minimum level of inventory that a firm wants to keep on hand at all times is referred to as:

• the reorder point.
• keiretsu.
• the opportunity cost.
• safety stock.
• the base level.

14.

The credit period begins on the:

• purchase order date.
• order process date.
• invoice date.
• shipping date.
• shipping arrival date.

15.

Given a fixed level of sales and a constant profit margin, an increase in the accounts payable period can result from:

• a decrease in the average accounts payable balance.
• an increase in the ending accounts payable balance.
• an increase in the cash cycle.
• an increase in the cost of goods sold account value.
• a decrease in the operating cycle.

16.

The three components of credit policy are:

• interest rate determination, repayment analysis and terms of sale.
• credit analysis, repayment analysis, and terms of the sale.
• collection policy, credit analysis, and interest rate determination.
• collection policy, credit analysis, and terms of the sale.
• collection policy, interest rate determination, and repayment analysis.

17.

Since the credit decision usually includes riskier customers, the decision should adjust for this by:

• discounting the cash inflows at a higher discount rate.
• decreasing the variable cost per unit.
• increasing the variable cost per unit.
• determining the probability that customers will not pay and reducing the expected cash flow.
• discounting the net cash flows at a lower discount rate.

18.

The most common means of financing a temporary cash deficit is a:

• long-term secured bank loan.
• short-term issue of corporate bonds.
• short-term secured bank loan.
• long-term unsecured bank loan.
• short-term unsecured bank loan.

19.

When credit is granted to another firm this gives rise to a(n):

• credit due and is called an installment note.
• accounts receivable and is called trade credit.
• accounts receivable and is called a consumer credit.
• trade receivable and is called an installment note.
• trade receivable and is called a secured loan.

20.

The operating cycle can be decreased by:

• paying accounts payable faster.
• increasing the accounts payable turnover rate.
• collecting accounts receivable faster.
• discontinuing the discount given for early payment of an accounts receivable.
• decreasing the inventory turnover rate.

21.

Selling goods and services on credit is:

a decision independent of customers.an investment in a customer.never a wise decision.never necessary unless customers cannot pay for the goods.permissible only if your bank lends the money.cash disbursements and cash collection for an item.selling a product and paying the supplier of that product.the arrival of inventory and cash collected from receivables.selling a product and collecting the accounts receivable.

the sale of inventory and cash collection.

23.

Browns Market currently has an operating cycle of 76.8 days. It is planning some operational changes that are expected to decrease the accounts receivable period by 2.8 days and decrease the inventory period by 3.1 days. The accounts payable turnover rate is expected to increase from 9 to 11.5 times per year. If all of these changes are adopted, what will be the firm's new operating cycle?

• 68.4 days
• 63.3 days
• 70.9 days
• 73.4 days
• 57.9 days

24.

On average, D & M sells its inventory in 37 days, collects on its receivables in 3.4 days, and takes 35 days to pay for its purchases. What is the length of the firms operating cycle?

• 33.6 days
• 1.4 days
• 41.6 days
• 40.4 days
• 5.4 days

25.

A firm has an inventory turnover rate of 15.7, a receivables turnover rate of 20.2, and a payables turnover rate of 14.6. How long is the cash cycle?

rev: 05_12_2016_QC_CS-51572

• 23.37 days
• 16.32 days
• 13.08 days
• 28.46 days
• 32.87 days

26.

Jordan and Sons has an inventory period of 48.6 days, an accounts payable period of 36.2 days, and an accounts receivable period of 29.3 days. Management is considering offering a 5 percent discount if its credit customers pay for their purchases within 10 days. This discount is expected to reduce the receivables period by 17 days. If the discount is offered, the operating cycle will decrease from ___ days to ___ days.

• 28.3; 11.3
• 77.9; 94.9
• 28.3; 45.3
• 77.9; 60.9
• 54.2; 37.2