The questions are attached bellow and I would like help to solve them

iPad '3 8:44 AM MBA 645A, Test 1 Dr. Wei Feng NAME: DATE: Part I - Multiple Choices (2 * 30 = 60 points) 1. Financial managers can take a variety of actions to influence the market value of a company's stock. All of the following are classifications of actions taken EXCEPT: a. investing decisions b. financing decisions c. dividend decisions d. tax implication decisions 2. arise from the divergent objectives between owners and managers. a. Shareholder relationships b. Stakeholder problems 0. Creditor problems d. Agency problems 3. There are three forms of business organization. Which of the following has unlimited liability? I. Corporation II. General partnership a. Only statement I is correct b. Only statement II is correct 0. Both statements I and II are correct d. Neither statement I nor II is correct 4. Financial intermediaries include a. securities brokers b. commercial banks c. securities dealers d. all of theseiPad '3 8:44 AM 51% E 5. If an investor purchased 100 shares of Biggee stock for 530 per share, 6 months ago, and then sold the stock today for 533 per share, what was the investor's holding period return if a total of $1 per share in dividends was received over the 6 month period? a. 10% b. 27.1% c. 17.1% d. 13.3% 6. The ratio, sometimes called the "acid test," is a more stringent measure of-than the current ratio. a. quick; liquidity b. fixed-asset turnover; activity 0. net profit margin; gross profit margin d. equity, activity 7. Firms with growth rates would be expected to have-payout ratios. a. high, low b. high, high 0. low, low d. low, high 8. A firm with an equity multiplier of 4.0, will have a debt ratio of a. 0.25 b. 1.00 c. 0.75 d. 4.00 9. Your current assets consist of cash, accounts receivable, and inventory. Total current liabilities equal SZO0,000. The average collection period is 20 days on average daily credit sales of $2,500. The current ratio is 1.3 and the quick ratio is 0.625. What is the balance in the cash account? a. $ 75,000 b. $ 65,000 0. $13S,OOO d. $ 50,000 10. Given the following information, calculate the return on equity for Regrets Only Dating Services, Inc.: 2of9iPad "3 8:44 AM 51% [E Net Profit margin = 5% Total asset turnover = 2 Debt ratio = 0.73 a. 14% b. 7.3% c. 37% cl. 21% 11. The ratio indicates the percentage of a firm's earnings that are distributed as dividends. a. dividend yield b.payout c. return on earnings d. earnings 12. Nukin' Gnats Pest Control is trying to determine its cash flow per share. It has revenue of SS0,000, $35,000 of expenses, $4,000 of depreciation and $3,000 of interest expense. The firm is in the 40% tax bracket. The firm has 75,000 shares of common stock outstanding. Its cash flow per share is: a. 5.08 b. 5.07 c. $92 d. 5.46 13. Heavily using debt to finance assets results in higher-as compared to ROI. a. Return on Sales b. Return on Stockholders' Equity 0. Return on Assets d. Times Interest Earned 14. The percentage of sales forecasting method is used by management to forecast the amount of a. profit expected for a given percentage increase in sales b. capital financing needed to promote marketing efforts 0. cash needed to finance future sales growth d. debt financing needediPad "3 me cas" account! 8:44 AM 51% E a. $ 75,000 b. $ 65,000 0. 5135,ooo d. $ 50,000 10. Given the following information, calculate the return on equity for Regrets Only Dating Services, Inc.: Net Profit margin = 5% Total asset turnover = 2 Debt ratio = 0.73 a. 14% b. 7.3% c. 37% cl. 21% 11. The ratio indicates the percentage of a firm's earnings that are distributed as dividends. a. dividend yield b.payout 0. return on earnings d. earnings 12. Nukin' Gnats Pest Control is trying to determine its cash flow per share. It has revenue of SS0,000, $35,000 of expenses, $4,000 of depreciation and $3,000 of interest expense. The firm is in the 40% tax bracket. The firm has 75,000 shares of common stock outstanding. Its cash flow per share is: a. $.08 b. 5.07 c. $92 d. 5.46 13. Heavily using debt to finance assets results in higher-as compared to ROI. a. Return on Sales b. Return on Stockholders' Equity 0. Return on Assets d. Times Interest EarnediPad '3 8:45 AM 14. The percentage of sales forecasting method is used by management to forecast the 15. l6. l7. amount of a. profit expected for a given percentage increase in sales b. capital financing needed to promote marketing efforts 0. cash needed to finance future sales growth d. debt financing needed In 1998, Hepler Company's sales were 526 million and its total assets were $10 million. Current liabilities were 54 million and total equity was $2 million. Hepler Company's sales for 1999 are forecasted to be $34 million, earnings after taxes are expected to be 5 percent of sales and dividends of $800,000 are expected to be paid. Assuming that the ratios "assets to sales" and "current liabilities to sales" in 1998 remain the same in 1999, determine the amount of additional financing required. a. $1,746,154 b. $1,446,154 c. $6,946,154 d. S946,154 The Danville Company is considering a $50 million expansion (capital expenditure) program next year. The company wants to determine approximately how much additional financing will be needed if the expansion program is undertaken. Next year the company expects to earn $25 million after interest and taxes. The company also plans to increase its dividends from SS million to $7 million. If the expansion program is accepted, the company expects working capital requirements to increase by approximately $8 million next year. Long-term debt retirement obligations total S3 million next year and depreciation is expected to be $13 million. No fixed assets are expected to be sold next year. a. $30 million b. $43 million c. $32 million d. $22 million Which of the following would indicate how much actual cash the firm has on hand? a. income statement b. balance sheet 0. statement of cash flows Cl. none Of the answers is correct 18. Finding the discounted current value of $1,000 to be received at the end of each of the next 5 years requires calculating the 51% E'iPad '3 u. llUlle UI Ult' 'dllbWElb lb L'Ullt'L'L 8:45 AM 18. Finding the discounted current value of $1,000 to be received at the end of each of the next 5 years requires calculating the a. future value of an annuity b. future value of an annuity due 0. present value of an annuity d. present value of an annuity due 19. The difference between an ordinary annuity and an annuity due is: 4 a. the interest rate b. the timing of the payments 0. the amount of the payments d. the number of periods 20. When a loan is amortized over a five-year term, the a. rate of interest is reduced each year b. amount of interest paid is reduced each year 0. payment is reduced each year d. balance is paid as a balloon payment in the fifth year 21. Jane wants to have $200,000 in an account in 20 years. If her account earns 11 percent per annum over the accumulation period, how much must she save per year (end of year) to have the SZO0,000? a. 525,116 b. $3,115 0. $10,000 d. S3,492 22. lnco purchased a computer for SZO0,000 and this machine is expected to generate annual cash flows of S48,271 over the next 5 years. What is the expected rate of return on this investment? a. 8.84% b. 26.58% c. 6.61% d. none of these 23. Mr. Moore is 35 years old today and is beginning to plan for his retirement. He wants to set aside an equal amount at the end of each of the next 25 years so that he can retire at age 60. He expects to live to the maximum age of 80 and wants to be able to withdraw 51% E'U UU.L/U iPad "3 8:45 AM 51% E* d. none of these 23. Mr. Moore is 35 years old today and is beginning to plan for his retirement. He wants to set aside an equal amount at the end of each of the next 25 years so that he can retire at age 60. He expects to live to the maximum age of 80 and wants to be able to withdraw $25,000 per year from the account on his 615t through 80th birthdays. The account is expected to earn 10 percent per annum for the entire period of time. Determine the size of the annual deposits that must be made by Mr. Moore. a. $212,850 b. 523,449 0. 52,164 d. $8,514 24. The yield-to-maturity of a bond with a finite maturity date is a function of all of the following variables except: a. the current price b. the required rate of return on the bond c. the uniform annual interest payments cl. the maturity value 25. Junk bonds are a. usually rated Ba or higher b. are issued by firms with a high debt ratio 0. issued with coupon rates at least 8 percentage points or more above the highest quality issues d. issued by firms with a low debt ratio 26. When the required rate of return is the coupon rate, the bond will sell at a discount. a. less than b. greater than c. the same as d. equal to 27. There is a(n)-relationship between the value of a bond and its required rate of return. a. direct b. distant c. inverse d. turgidiPad cs 8:45 AM 50% ED 28. Two-years ago, Trans-Atlantlc Airlines sold a $250 million bond Issue to finance the purchase of new jet airliners. These bonds were issued in SlOOO denominations with an original maturity of 12 years and a coupon rate of 12%. Determine the value today of one of these bonds to an investor who requires a 14% rate of return on these securities. a. $626 b. $463 0.5897 d. 5270 29. The State of Adaven issued $50 million of perpetual bonds in 1990. The bonds were issued in $100 denominations with an annual coupon interest rate of 5%. Determine the value of these bonds today to an investor who requires a 10% return on his investment. a.$25 b. $5 0. $10 d. SSO 30. A General Electric 7V225 bond closed at 98. What is the current yield? a. 7.65% b. 7.81% c. 7.50% d. 7.34%iPad '3 Part II. Questions Sales Total asset turnover Current ratio Quick ratio Current liabilities to equity ratio Average collection period Total debt to total asset ratio Balance sheet Assets Cash Account receivable Inventories Total current assets Fixed assets Total assets Liabilities and Eguig Account payable Total current liabities Long term debt Total debt Shareholders' equity Total Iiabilies and equity 32. (15 points) DuPount Identity Gulf Controls, Inc, has a net margin of 10% and earnings after tax (Net Income) of $600,000. Its current balance sheet follow: a. Calculate Gulf' 5 return on stockholders' equity b. Compare with industry average. What is the source of major difference between the Gulf and the industry average ratios? 8:45 AM 31. (15 Points) Financial Statement: Fill in the balance sheet for X company based on the following data (assume 365-day year) 1,825,00000 4 3 2 0.3 20 0.4 ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? 50% Cj'iPad "3 8:45 AM 32. (15 points) DuPount Identity Gulf Controls, Inc, has a net margin of 10% and earnings after tax (Net Income) of $600,000. Its current balance sheet follow: a. Calculate Gulf' 5 return on stockholders' equity b. Compare with industry average. What is the source of major difference between the Gulf and the industry average ratios? Gulf Net profit margin 10% Net income (earnings after tax) 600,000 Balance sh eet Assets Current assets 1,800,000 Fixed assets 2,200,000 Total assets 4,000,000 Liabilities and Equities Current liabilities 600,000 long-term debt 1,000,000 Total debt 1,600,000 common stock SO0,000 retained earnigns 1,900,000 Total equities 2,400,000 Total Iiabilites and equity 4,000,000 Industry benchmark Net profit margin 6% Total asset turnover 2.S Equity multiplier 14 Return on equity ??? Company analysis Sales 90f9 Tntal accent tnrnnvr-rr in? Net profit marginiPad '3 8:45 AM 50% E' Gulf Net profit margin 10% Net income (earnings after tax) 600,000 Balance sh eet Assets Current assets 1,800,000 Fixed assets 2,200,000 Total assets 4,000,000 Liabilities and Equities Current liabilities 600,000 long-term debt 1.000l000 Total debt 1,600,000 common stock 500,000 retained earnigns 1,900,000 Total equities 2,400,000 Total Iiabilites and equity 4,000,000 Industry benchmark Net profit margin 6% Total asset turnover 2.5 Equity multiplier 1.4 Return on equity ??? Company analysis Sales ??? Net profit margin ??? Total asset turnover ??? Equity multiplier ??? Return on equity ??? 33. (10 points) Y bank has offered you a S1,000,000 5-year loan at an interest rate of 11.5%, requiring equal annual end-of-year payments that include both principal and interest on the unpaid balance. a. Develop an amortization schedule for this loan. b. Out of the 4th year payment, what is the amount for principal and interest respectively