Question 1

1pts

If a firm increased its current assets and decreased its current liabilities, the firm's net working capital would [ Select ] ["decrease", "increase", "stay constant"] .

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Question 2

1pts

A price-to-sales ratio of 8.5 indicates that investors are willing to pay [ Select ] ["$1 for every $8.5 of sales", "$8.5 for every $1 of sales"] .

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Question 3

1pts

When a bond's coupon rate is higher than the yield to maturity, the bond is selling at a [ Select ] ["premium", "discount", "par"] .

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Question 4

1pts

All else equal, [ Select ] ["an annuity due", "", "an ordinary annuity", ""] has a higher future value than [ Select ] ["an annuity due", "an ordinary annuity"] .

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Question 5

1pts

Portfolio diversification eliminates [ Select ] ["diversifiable", "undiversifiable"] risks.

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Question 6

3pts

Suppose Orange Inc, had $151,402 in taxable income. Use the rates from the following table to compute the company'saveragetax rate. Write your answer in %. (For example, If your answer is 22.53%, just input 20.53)

taxable income%$-$50,00015%$50,000$75,00025%$75,000$100,00034%$100,000$335,00039%

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Question 7

5pts

Based on the information given below, calculate the following ratios for Big Rock Candy Mountain for fiscal year 2016.

(1) (1 pt) current ratio

(2) (1 pt) inventory turnover

(3) (1 pt) debt-to-equity ratio

(4) (2 pts) PE ratio

2016

Shares outstanding

15,000

Year-end Price

$15

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Question 8

2pts

What is the future value of $1,362 invested for 2 years at 2.7 percent compounded quarterly?

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Question 9

2pts

Katie's Dinor borrowed $13,289 to refurbish its current facility. The firm has paid 8.3 percent interest for 4 years, but the payments were madeevery month. What is the amount of eachmonthlypayment?

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Question 10

8pts

Consider Banana Co. has the following income statement and balance sheet data for FY 2018. In FY 2017, long-term liabilities = 500.

Use the following information, please computex, whenx = operating cash flows + CF to creditors.

FY 2018

Sales

2,262

Cost of goods sold

1,655

Depreciation

90

Other operating expenses

298

Interest expenses

49

Tax rate

0.34

Current assets

761

Net fixed assets

1,118

Current liabilities

603

Long-term liabilities

547

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Question 11

6pts

Consider Peach Co. has the following income statement and balance sheet data for FY 2017 and 2018.

Use the following information, please computeCF to shareholdersin 2018.

FY 2018FY 2017Current assets708600Net fixed assets1,1181,000Current liabilities603500Long-term liabilities617500Net Income60Dividends50

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Question 12

2pts

A stock has a beta of 1.3, the market premium is 7.6 percent, and the risk-free rate is 1.7 percent. What must the expected return on this stock be? Present your answer in %.(For example, If your answer is 22.53%, just input 20.53)

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Question 13

5pts

Special Motors recently paid $2 as its annual dividend. Future dividends are projected at $2.11 $2.29, and $2.35 over the next three years, respectively. After that, the dividend is expected to decrease by 3.3% annually. What is one share of this stock worth at a rate of return of 12.5%?

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Question 14

2pts

Blue River, Inc. bonds have a face value of $1,000. The bonds carry a 7.5 percent coupon, pay interest semiannually, and mature in 12 years. What is the current price of these bonds if the yield to maturity is 6.2 percent? Round your answer to two decimal places.

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Question 15

10pts

Jane Doe will retire in 25 years. Jane currently has $63,777 in account X and $46,821 in account Y. Jane plans to add $9,309 at the end of each year to Account X and also add $5,140 to Account Y at the end of each year. Account X earns 7.2 percent annually and Account Y earns a return of 4.8 percent annually. When Jane retires, she will transfer the entire savings to a retirement account that earns 3.6% a year, and will withdraw an equalmonthlyamount of $x for the next 20 years, leaving nothing behind. How much will she be able to withdraw every month?

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Question 16

10pts

You are given the following information for Moreno Co. Assume the company's tax rate is 35%.

Debt: 6,000 7.6 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 106 percent of par; the bonds make semiannual payments. Preferred stock: 50,000 shares of 5 percent preferred stock with a current price of $98, and a par value of $100.

Common stock: 510,000 shares outstanding, selling for $71 per share; the beta is 0.8.

Market: 10 percent average market return and 2.5 percent risk-free rate.