Please help with these multiple choice questions

Question 1 Which of the following ratios would be used to assess the liquidity of a company? (i) Return on capital employed (ii) Gross profit percentage (iii) Acid test ratio (iv) Gearing ratio A. (i) and (ii) only B. (iii) only C. (iv) only D. (ii) and (iv) only Question 2 Which of the following statements concerning financial management are correct? (1) it is concerned with investment decisions, financing decisions and dividend decisions (2) It is concerned with financial planning and financial control (3) It considers the management of risk A. 1 and 2 only B. 1 and 3 only C. 2 and 3 only D. 1, 2 and 3 Question 3 PFM Pic is considering the purchase of a new machine. It has identified two possible machines with initial costs and expected cash savings per year as follows CE GE CE 20,000 -20.000 CE 5.500 Machine A Machine B CE 6,000 7.300 3,000 5,000 4.000 CE 7.200 5.000 6.500 Machine A has a useful life of 5 years while machine Bhas a useful life of 4 years. Neither of the machines has any residual value at the end of their lives. The two machines are mutual exclusive. The opportunity cost of capital for PFM Pic is 5% per year. If PFM Picis going to replace the chosen machine each time when it reaches the end of its useful life, which machine would you recommend the management to invest? A The equivalent annual values of machine A, B are 482.7 and E304, respectively. A should be bought 8. The equivalent annual values of machine A, B are 500 and 677, respectively, Bahodid be bought C. The equivalent annual costs of machine A, B are 482.7 and 1304, respectively. E should be bought D. The equivalent annual costs of machine A, B are E468.5 and 455, respectively should be bought 3 Question 4 Still looking at Question I, using the discount cate 6% and 20%, what's the internal rate of retum of machine A? A 12.97% B. 10.45% C. 14.19% D. 9.091% Questions Which of the following statements concerning working capital management are correct? (1) The twin objectives of working capital management are profitability and liquidity (2) A conservative approach to working capital investment will increase profitability (3) Working capital management is a key factor in a company's long-term success A 1 and 2 only B. 1 and 3 only C2 and 3 only D. 1, 2 and 3 Question 6 The agency problemrefers to which one of the following situations? A Shareholders acting in their own short-term interests rather than the long-term interests of the company B. A vocal minority of shareholders expecting the directors to act as their agents and pay substantial dividends C. Companies reliant upon substantial government contracts such that they are effectively agents of the government D. The directors acting in their own interests rather than the shareholders interests Question 7 Which of the following actions is MOST likely to increase shareholder wealth? A The weighted average cost of capital is decreased by a recent financing decision B. The financial rewards of directors are linked to increasing earnings per share C. The board of directors decides to invest in a project with a positive NPV D. The annual report declares full compliance with the corporate governance code Question 8 NYC's current cum dividend share price is 03.45 and the company has just announced a dividend per share of 20p. At what rate do investors expect dividends to grow in the future if the current share price is considered to be fair and shareholders require a rate of return of 15 per cent? A 8.33% B 3.25% C4.56% D. 767 Question 9 The shares of AMC pic are currently quoted at 200p per share and the company has been paying a dividend of 30p per share for the last 10 years. The company is planning to retain the next three years' dividends to invest in a new project. The project's cash flows will begin in year 4, allowing the company to pay an increased dividend of Op per share from that year onwards. How much would the share price change? A -24.4p per share B. - 14.2p per share 58p per share D. 10.2p per share Question 10 Which of the following is the correct statement of the conclusion of Modigliani and Miller on the relevance of dividend policy? A Increase in retentions result in a higher growth rate B. All shareholders are indifferent between receiving dividend income and capital gains C. The value of the shareholders' equity is determined solely by the firm's investment selection criteria D. Discounting the dividends is not an appropriate way to value the firm's equity Question 11 Suppose you do not own a share. How would you use options to insure against a fall in the value of a share? A Buy a call and lend at the risk-free 8. Buy a share and a put C. Buy a put and a call D. Buy a call and borrow at risk-free Question 12 Jo Cox decides to check whether Fred, the nerdy banker, was correct in claiming that Geothermal's cost of equity is 14%. She estimates Geothermal's bets at 1.20. The risk-free interest rate is 6%, and the long-run average market risk premium is 7.6% What is the expected rate of return on Geothermal's common stock, assuming of course that the CAPM is true? A 5.88% B. 15.12% C. 7.84% D. 3,65% Question 13 Looking at Question 12, calculate Geothermal's weighted average cost of capital, assuming that 50% of Geothermal's capital structure is equity, and 50% of the company's capital structure is debt finance. The corporate tax rate is 30% A 9.66% 8.5.20% C. 3.21% D. 10.35% Question 14 Comment on the validity of the following statements, in relation to the Efficient Market Hypothesis Statement 1: An inefficient market is one in which the value of securities is not always an accurate reflection of the available information. Statement 2: In a semi-strong form market the share price incorporates all past information and all publicly available information, Statement 1 Statement 2 A. True True B. True False C. False True D. False False Question 15 Given a risk-adjusted discount rate of 8%, calculate the discounted payback period for the following cash flow of a project. If the maximum target discounted payback period is 5 years, comment on the financial acceptability of the project. Year 5 Year Year 1 Year 2 -9000 2000 2500 Year 3 Year 4 2800 3000 3000 A. Accept the project, as the target payback period is 5, which is longer than the adjusted payback period of 3.55 B. Turn down the project, as the adjusted payback period is 5.28, which is longer than the target period of 5 years C Accept the project, as the target payback period is 5, which is longer than the adjusted payback period of 3.79. D. Accept the project, as the adjusted payback period is 4.28, which is shorter than the target period of 5 years