Which of the following terms addresses the problem when introducing a new product line could steal sales away from an existing product line?

Select one:

a.

Cannibalisation

b.

Operating cash flow

c.

Sunk cost

d.

None of the above

Assume your firm has an unused machine that originally cost $50 000, has a book value of $30 000 right now, and can be sold right now for $20 000. Ignoring taxes, the correct opportunity cost for this machine in capital budgeting decisions is:

Select one:

a.

$50 000

b.

$30 000

c.

$10 000

d.

$20 000

Investing 100 euros today for one year at a 4% interest rate, if interest is calculated on a monthly basis, the future value in a year is:

Select one:

a.

equal to 100

b.

more than 104

c.

equal to 104

d.

less than 104

The price-earnings (P/E) ratio is 12. The earnings per share over the last twelve months was $5.20. The share has a book value of $9 per share and an annual dividend is $1 per share. What is the current market price of the stock?

Select one:

a.

$46.80

b.

$12.00

c.

$62.40

d.

$50.40

What is the cash conversion cycle (CCC) for a firm with days in receivables period of 10 days, a days in payables period of 30 days, and days in inventory period of 60 days?

Select one:

a.

100 days

b.

-20 days

c.

40 days

d.

80 days

According to DuPont model, the return of equity (ROE) of a company could be increased if

a.

The company is able to reduce the turnover ratio of its total assets

b.

A profitable company increases its leverage

c.

The company issues new shares

d.

A profitable company lowers its leverage

Your task is to find the value of a coupon bond. You have the following information: The par value of the bond is 200 eur, the coupon rate is 3% and the required rate of return from equally risky bonds is 2%. The bond has exactly 5 years to maturity.

(Please round your answer to the nearest full number. For example if the answer is 231.45, please return 231)

The company is expected to pay out 3 EUR as dividends, next year. What is the fundamentally correct value for the company stock if the dividends are expected to grow 4.0% a year and the required return of stock investors is 8%.

(Please round up your answer to the nearest full number. For example answer 80.213 should be presented as 80)

You are analysing a capital investment project. You forecast the following cash-flows:

year	0	1	2	3	4	5
cash flow		+5	+15	-5	+26	0

What is the maximum investment you are willing to make into this project today if your required return is 15% per year (e.g. cost of capital)

(Show positive number as an answer. Please round your answer to the nearest full number. For example if your answer for investment is 21.26, show 21 as an answer, for 21.51 the answer should be 22)

Closest to the long-run objective of financial management is to:

Select one:

a.

Maximise the company net profits

b.

Maximize the growth of the company

c.

Maximize the company sales revenues

d.

Maximise the value of the firm