QUESTION 1

1. You are given the following information for Mobility Research, Inc. (MRI).
3. Sales$200,000Costs$105,000SG&A$20,000Interest$20,000Dividend paid$8,000Retained Earnings Added$20,000Total Assets$85,000Equity$45,000Tax Rate35%
5. How much was the depreciation charge for MRI? (Hint: Prepare the income statement. You will have to work backwards to find the missing data.)
6. A.$16,000
7. B.$7,846
8. C.$1,231
9. D.$3,769
10. E.$20,077
11. F.$11,923

6 points

QUESTION 2

1. You are given the following information for last year for Four Corners, Inc. (FCI).
3. Sales$200,000Increase in net fixed assets$15,000SG&A Expenses$15,000Cost of goods sold$80,000Interest expense$9,000Depreciation expense$8,000Taxes$21,000New equity raised$8,000Net increase (or decrease) in long-term debt($2,500)Dividends$15,000
5. What was theoperating cash flowfor FCI?
6. A.$ 79,600
7. B.$ 88,600
8. C.$ 84,000
9. D.$ 66,000
10. E.$ 75,000
11. F.$ 70,600

6 points

QUESTION 3

1. You plan to retire in 40 years with $1 million. You have an investment available that provides a rate of return of 6.5% per year, compounded monthly.How much will you have to depositevery monthinto this investment account to reach your retirement goal?
2. A.$605.80
3. B.$437.90
4. C.$670.98
5. D.$502.14
6. E.$380.98
7. F.$742.15

6 points

QUESTION 4

1. Use the following information for MDB, Inc. for this problem.
3. MSB Inc.AssetsCurrent assetsCash10,020Accounts receivable9,200Inventory15,500Total34,720Fixed assetsNet plant and equipment50,164Total assets84,884Liabilities and owners' equityCurrent liabilitiesAccounts payable8,400Notes payable5,600Total14,000Long-term debt20,000Owners' equityCommon stock and paid-in surplus31,500Accumulated retained earnings19,384Total50,884Total liabilities and owners' equity84,884Income statementSales62,000-Cost of goods sold23,200Gross Margin38,800-SG&A18,000-Depreciation3,600EBIT17,200-Interest paid2,000Taxable income15,200Taxes30%4,560Net income10,640Dividends40%4,256Retained earnings60%6,384Shares of stock outstanding12,000Market price per share26
5. What are the values of the three ratios in the DuPont identity (Profit Margin, Total Asset Turnover, and Equity Multiplier)?
6. A.0.1238, 0.6313, and 1.7030
7. B.0.2158, 0.8241, and 1.5953
8. C.0.2158, 0.8331, and 1.6057
9. D.0.1716, 0.7219, and 1.6878
10. E.0.1238, 0.6313, and 1.6354
11. F.0.1716, 0.7304, and 1.6682

6 points

QUESTION 5

1. You are planning to retire in 15 years with $1,000,000.You can earn 12.5% compoundedquarterly. How much do you need to investtoday? (Note: Answers are rounded.)
2. A.$157,820
3. B.$143,775
4. C.$193,500
5. D.$182,560
6. E.$211,260
7. F.$166,785

6 points

QUESTION 6

1. Use the following information for MDB, Inc. for this problem.
3. MSB Inc.AssetsCurrent assetsCash10,020Accounts receivable9,200Inventory15,500Total34,720Fixed assetsNet plant and equipment50,164Total assets84,884Liabilities and owners' equityCurrent liabilitiesAccounts payable8,400Notes payable5,600Total14,000Long-term debt20,000Owners' equityCommon stock and paid-in surplus31,500Accumulated retained earnings19,384Total50,884Total liabilities and owners' equity84,884Income statementSales62,000-Cost of goods sold23,200Gross Margin38,800-SG&A18,000-Depreciation3,600EBIT17,200-Interest paid2,000Taxable income15,200Taxes30%4,560Net income10,640Dividends40%4,256Retained earnings60%6,384Shares of stock outstanding12,000Market price per share26
5. What is the equity multiplier and price to earnings (PE) ratio?
6. A.1.606,25.23
7. B.1.688,32.99
8. C.1.595,27.99
9. D.1.635,37.27
10. E.1.668,29.32
11. F.1.703,42.70

6 points

QUESTION 7

1. The star basketball player from your college signed a contract with Telcics. Under this contract he will be paid $1,200,000 at the end of each year for the following four years. He can earn 12 percent annual rate on all investments. What is the present value of this contract?
2. A.$ 3,341,084
3. B.$ 3,037,349
4. C.$ 3,568,885
5. D.$ 3,189,217
6. E.$ 3,644,819
7. F.$ 3,492,952

6 points

QUESTION 8

1. We are given the following information for Pinanski, Inc.
3. Sales$130,000Debt55,000Dividends5,000Equity40,000Interest rate7%Net income13,000Tax rate30%
5. Assume the company has no short-term debt. Also, assume that all asset turnover, profit margin, and dividend payout ratios remain constant. What is the company's return on invested capital (ROIC)? (Hint: First, find EBIT working backwards.)
6. A.18.28%
7. B.16.52%
8. C.14.94%
9. D.13.51%
10. E.20.24%
11. F.22.45%

6 points

QUESTION 9

1. You are given the following information for last year for Campus Dining, Inc. (CDI).
3. Sales$8,700SG&A Expenses$430Cost of goods sold$4,400Interest expense$320Depreciation expense$480Taxes$921Dividends$430
5. What was theretention ratiofor CDI?
6. A.77%
7. B.71%
8. C.68%
9. D.83%
10. E.74%
11. F.80%

6 points

QUESTION 10

1. You deposit $3,000 at the end of everysix months
2. into an account that pays 6% interest compoundedmonthly. How much will be in the account after 6 years?
3. A.$45,252
4. B.$35,278
5. C.$42,668
6. D.$38,858
7. E.$37,011
8. F.$48,044

6 points

QUESTION 11

1. How long will it take for $1,000 to grow to $2,000 at a rate of 18 percent compoundedmonthly?
2. A.7.28
3. B.5.57
4. C.3.88
5. D.6.48
6. E.4.84
7. F.5.83

6 points

QUESTION 12

1. An investment promises to quadruple your money in nine years. If the interest is compounded monthly, what effective annual rate would you earn? (Hint: Calculate the monthly rate and convert that to the effective annual rate, EAR.)
2. A.25.99%
3. B.16.65%
4. C.18.92%
5. D.21.90%
6. E.31.95%
7. F.41.42%

6 points

QUESTION 13

1. You plan to retire with $800,000 in 20 years.How much should you depositeach monthinto an account that pays 8.5% annual rate compounded monthly? (Note: Compounding frequency is the same as the deposit frequency. Answers are rounded.)
2. A.$1,124
3. B.$1,276
4. C.$1,709
5. D.$2,056
6. E.$1,080
7. F.$1,198

6 points

QUESTION 14

1. BB Lean, Inc. (BBL) had sales of $200,000 on which it earned a net income of $18,000. It has a total debt of $45,000 and total equity of $60,000. Last year, it paid dividends of $6,000. What is its sustainable growth rate (SGR)?
2. A.45.00%
3. B.25.00%
4. C.55.56%
5. D.68.75%
6. E.36.36%
7. F.30.43%

6 points

QUESTION 15

1. You just won the lottery!You wish to put away enough money so that you can withdraw $6,000per monthfor 50 years.You can earn 9% rate compounded monthly on any funds you deposit.How much will you have to deposit now to meet your goal?
2. A.$765,313
3. B.$745,691
4. C.$777,845
5. D.$785,850
6. E.$714,970
7. F.$790,262

6 points

QUESTION 16

1. You are 20 years old. You deposit $200 per month for 4 years into an account paying 12 percent annual rate, compounded monthly. After that, you stop making any new deposits but leave the money in the account, earning the same rate. How much money will be in the account when you become 64 years old?
2. A.$905,595
3. B.$1,452,785
4. C.$763,410
5. D.$1,354,505
6. E.$1,058,679
7. F.$1,213,776

6 points

QUESTION 17

1. You invest $1,000 in a junk bond that pays no interest but promises to pay back $5,000 after 8 years.What rate of return do you expect to earn?
2. A.25.89%
3. B.17.46%
4. C.22.28%
5. D.33.35%
6. E.14.35%
7. F.21.15%