{"id":47571,"date":"2022-04-01T08:04:02","date_gmt":"2022-04-01T08:04:02","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/bfin-3321-exam-business-finance-homework-help\/"},"modified":"2022-04-01T08:04:02","modified_gmt":"2022-04-01T08:04:02","slug":"bfin-3321-exam-business-finance-homework-help","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/bfin-3321-exam-business-finance-homework-help\/","title":{"rendered":"Bfin 3321 exam | Business &#038; Finance homework help"},"content":{"rendered":"<div>\n<p>BFIN 3321 Review<br \/>1. In the financial crisis that started in 2006, a significant indicator of the U.S. economic decline<br \/>was:<br \/>A. a significant drop in interest rates.<br \/>B. a sharp increase in unregulated Ponzi-type security sales.<br \/>C. rising defaults by subprime mortgage borrowers.<br \/>D. a large increase in loan default due to unemployment.<br \/>2. The financial crisis that started in 2006 was magnified by which of the following?<br \/>A. Public concern over the war in Afghanistan<br \/>B. Consistently increasing oil and gas prices<br \/>C. Ethical issues affecting high value investment<br \/>D. Mortgage lenders securitizing large quantities of their loans<br \/>3. Not all cash a company generates will be returned to the investors. Which of the following will<br \/>NOT reduce the amount of capital returned to the investors?<br \/>A. Retained earnings<br \/>B. Taxes<br \/>C. Dividends<br \/>D. None of these will reduce the amount of capital returned to the investors.<br \/>4. This subarea of finance involves methods and techniques to make appropriate decisions about<br \/>what kinds of securities to own, which firms&#8217; securities to buy, and how to be paid back in the<br \/>form that the investor wishes.<br \/>A. Real markets<br \/>B. Investments<br \/>C. Financial management<br \/>D. None of these<br \/>5. This subarea of finance looks at firm decisions in acquiring and utilizing cash received from<br \/>investors or from retained earnings.<br \/>A. Investments<br \/>B. Financial management<br \/>C. Treasury management<br \/>D. None of these<br \/>6. Financial management involves decisions about which of the following?<br \/>A. Which projects to fund<br \/>B. How to minimize taxation<br \/>C. What type of capital should be raised<br \/>D. All of these<br \/>7. This subarea of finance helps facilitate the capital flows between investors and companies.<br \/>A. Investments<br \/>B. Financial management<br \/>C. Treasury management<br \/>D. Financial institutions and markets<br \/>8. This subarea of finance is important for adapting to the global economy.<br \/>A. Investments<br \/>B. Financial management<br \/>C. International finance<br \/>D. Financial institutions and markets<br \/>9. A potential future negative impact to value and\/or cash flows is often discussed in terms of<br \/>probability of loss and the expected magnitude of the loss. This is called:<br \/>A. options.<br \/>B. standard deviation.<br \/>C. coefficient of variation.<br \/>D. risk.<br \/>10. This is a general term for securities like stocks, bonds, and other assets that represent ownership<br \/>in a cash flow.<br \/>A. Investment<br \/>B. Financial asset<br \/>C. Real asset<br \/>D. Financial markets<br \/>11. Which of the following is defined as a group of securities that exhibit similar characteristics,<br \/>behave similarly in the marketplace, and are subject to the same laws and regulations?<br \/>A. Investments<br \/>B. Asset classes<br \/>C. Market instruments<br \/>D. Financial markets<br \/>12. The most commonly accepted groups of asset classes include all of the following except:<br \/>A. Stocks<br \/>B. Bonds<br \/>C. Machinery and equipment<br \/>D. Real estate<br \/>13. Which of the following is the firm&#8217;s highest-level financial manager?<br \/>A. Chief executive officer<br \/>B. Chief financial officer<br \/>C. Board of directors<br \/>D. Corporate governance<br \/>14. Which of the following managers would NOT use finance?<br \/>A. Operational managers<br \/>B. Marketing managers<br \/>C. Human resource managers<br \/>D. All of these would use finance.<br \/>15. Which of the following personal decisions is NOT impacted by finance?<br \/>A. Borrowing money to purchase cars or homes<br \/>B. Making credit card payments<br \/>C. Making retirement decisions<br \/>D. All of these are impacted by finance.<br \/>16. When determining a form of business organization, all of the following are considered EXCEPT:<br \/>A. who owns the firm.<br \/>B. the owners&#8217; risks.<br \/>C. the tax ramifications.<br \/>D. the physical location of the business.<br \/>17. This type of business organization is relatively easy to start, and it is subject to much lighter<br \/>regulatory and paperwork burden than other business forms.<br \/>A. Sole proprietorship<br \/>B. Partnership<br \/>C. Corporation<br \/>D. Hybrid organization<br \/>18. This type of business organization is entirely legally independent from its owners.<br \/>A. Sole proprietorship<br \/>B. Partnership<br \/>C. Public corporations<br \/>D. Hybrid organizations<br \/>19. Which of the following is NOT considered a hybrid organization?<br \/>A. S corporation<br \/>B. Limited liability partnership<br \/>C. Limited liability company<br \/>D. Limited partnership<br \/>E. All of these are considered hybrid organizations.<br \/>20. The practice generally known as double taxation is due to:<br \/>A. shareholders&#8217; dividends being taxed at both the federal and state levels.<br \/>B. corporate income being taxed at both the federal and state levels.<br \/>C. interest on shareholders&#8217; dividends being taxed as income.<br \/>D. corporate incomes being taxed at the corporate level, then again at the shareholder level when<br \/>corporate profits are paid out as dividends.<br \/>21. As individual legal entities, corporations assume liability for their own debts, so the shareholders<br \/>hold:<br \/>A. only limited liability.<br \/>B. unlimited liability.<br \/>C. shared liability.<br \/>D. joint liability.<br \/>22. In order for an angel investor or venture capitalist to exchange capital for ownership in a business<br \/>that is a sole proprietorship, which of these must happen?<br \/>A. The business must be re-formed as a partnership<br \/>B. The owner must give up some control<br \/>C. The owner must co-sign on all loans<br \/>D. Both A and B<br \/>23. For corporations, maximizing the value of owner&#8217;s equity can also be stated as:<br \/>A. maximizing retained earnings.<br \/>B. maximizing earnings per share.<br \/>C. maximizing net income.<br \/>D. maximizing the stock price.<br \/>24. A metaphor used to illustrate how an individual pursuing his own interests also tends to promote<br \/>the good of the community.<br \/>A. Agency theory<br \/>B. Angel investor<br \/>C. Invisible hand<br \/>D. Perks or perquisites<br \/>25. This should be the primary objective of a firm as it may actually be the most beneficial for society<br \/>in the long run.<br \/>A. Minimizing layoffs<br \/>B. Maximizing market share<br \/>C. Minimizing costs<br \/>D. Maximizing shareholder value<br \/>26. Nonwage compensation that might actually enhance owner value, in that such items may boost<br \/>managers&#8217; productivity.<br \/>A. Agency theory<br \/>B. Angel investor<br \/>C. Invisible hand<br \/>D. Perks or perquisites<br \/>27. Which of these are NOT basic approaches to minimizing the agency problem?<br \/>A. Ignore the conflict of interest<br \/>B. Monitor managers&#8217; actions<br \/>C. Align managers&#8217; personal interest with those of the owners by making the managers owners<br \/>D. All of these are basic approaches to minimizing the agency problem.<br \/>28. Which of the following is an example of aligning managers&#8217; personal interests with those of the<br \/>owners?<br \/>A. Allow the managers to have as many perks as they request.<br \/>B. Pay the managers high salaries.<br \/>C. Offer the managers an equity stake in the firm.<br \/>D. Trust the managers&#8217; actions as they will always act in the owners&#8217; best interest.<br \/>29. This is the set of laws, policies, incentives, and monitors designed to handle the issues arising<br \/>from the separation of ownership and control.<br \/>A. Agency theory<br \/>B. Corporate governance<br \/>C. Defined benefit plan<br \/>D. Invisible hand<br \/>30. This group is elected by stockholders to oversee management in a corporation.<br \/>A. Chief counselors<br \/>B. Chief executives<br \/>C. Board of directors<br \/>D. Auditors<br \/>31. These individuals examine the firm&#8217;s accounting systems and comment on whether financial<br \/>statements fairly represent the firm&#8217;s financial position.<br \/>A. Accounting departments<br \/>B. Chief financial officers<br \/>C. Board of directors<br \/>D. Auditors<br \/>32. These individuals follow a firm, conduct their own evaluations of the company&#8217;s business<br \/>activities, and report to the investment community.<br \/>A. Auditors<br \/>B. Investment analysts<br \/>C. Investment bankers<br \/>D. Credit analysts<br \/>33. These individuals help firms access capital markets and advise managers about how to interact<br \/>with those capital markets.<br \/>A. Auditors<br \/>B. Investment analysts<br \/>C. Investment bankers<br \/>D. Credit analysts<br \/>34. These individuals examine a firm&#8217;s financial strength for its debt holders.<br \/>A. Auditors<br \/>B. Investment analysts<br \/>C. Investment bankers<br \/>D. Credit analysts<br \/>35. Which of the following is legal duty between two parties where one party must act in the interest<br \/>of the other party?<br \/>A. Agency theory<br \/>B. Angel investor<br \/>C. Fiduciary<br \/>D. Investment banker<br \/>36. Which of the following can create ethical dilemmas between corporate managers and<br \/>stockholders?<br \/>A. Agency relationship<br \/>B. Auditors<br \/>C. Boards of directors<br \/>D. Venture capitalist<br \/>37. Individuals who provide small amounts of capital and expert business advice to small firms in<br \/>exchange for an ownership stake in the firm are referred to as:<br \/>A. institutional investors.<br \/>B. corporate investors.<br \/>C. angel investors.<br \/>D. capital investors.<br \/>38. The opportunity to buy stock at a fixed price over a specific period of time is referred to as:<br \/>A. stock opportunities.<br \/>B. stock options.<br \/>C. real assets.<br \/>D. restricted stock.<br \/>39. The portion of a company&#8217;s profits that are kept by the company rather than distributed to the<br \/>stockholders as cash dividends is referred to as:<br \/>A. restricted earnings.<br \/>B. venture capital.<br \/>C. retained earnings.<br \/>D. institutional investment.<br \/>40. An employee stock option plan is:<br \/>A. a perk usually only given to the board of directors as compensation.<br \/>B. a plan that only partnerships can use to defer compensation to partners.<br \/>C. a way to align the interests of employees with those of the owners.<br \/>D. None of these answers is correct.<br \/>41. Outside parties that monitor the firm include all of the following EXCEPT:<br \/>A. credit agencies.<br \/>B. the New York Stock Exchange.<br \/>C. analysts.<br \/>D. bankers.<br \/>42. Which of the following is NOT a function of the board of directors?<br \/>A. Hire the CEO<br \/>B. Evaluate the CEO<br \/>C. Design compensation contracts for the CEO<br \/>D. Provide reports to the auditors<br \/>43. The overall goal of the financial manager is to:<br \/>A. minimize total costs.<br \/>B. maximize net income.<br \/>C. maximize earnings per share.<br \/>D. maximize shareholder wealth.<br \/>44. Maximizing owners&#8217; equity value means carefully considering all of the following EXCEPT:<br \/>A. how to best bring additional funds into the firm.<br \/>B. which projects to invest in.<br \/>C. how best to increase the firm&#8217;s risk.<br \/>D. how best to return the profits from those projects to the owners over time.<br \/>45. The agency relationship in corporate finance refers to:<br \/>A. when the shareholders hire a manager to run their company.<br \/>B. when the corporate hires an advertising agency to market their new product or service.<br \/>C. when the board of directors are elected to staggered terms.<br \/>D. when the board of directors oversee the CEO.<br \/>46. The most common type of business in the United States is the:<br \/>A. corporation.<br \/>B. partnership.<br \/>C. sole proprietorship.<br \/>D. hybrid organization such as a limited liability company.<br \/>47. The biggest disadvantage of the sole proprietorship is:<br \/>A. unlimited liability.<br \/>B. double taxation.<br \/>C. limited access to capital.<br \/>D. total control.<br \/>48. Which of the following statements is incorrect?<br \/>A. Sole proprietorships are subject to less regulation.<br \/>B. Both angel investors and venture capitalists exchange capital for ownership.<br \/>C. Shareholders are responsible for paying off the corporate bonds in the event of a bankruptcy.<br \/>D. All of these statements are correct.<br \/>49. All of the following are advantages to organizing as a corporation EXCEPT:<br \/>A. limited liability.<br \/>B. double taxation.<br \/>C. easy access to capital.<br \/>D. easy to transfer ownership.<br \/>50. Which of the following statements is correct?<br \/>A. Sole proprietorships are easy to start.<br \/>B. If the sole proprietorship gets sued, the owner is not liable.<br \/>C. It is relatively easy for sole proprietorships to raise money.<br \/>D. Profits from the sole proprietorship are subject to double taxation.<br \/>51. From a taxation perspective, the form of business organization with the highest business level<br \/>taxes is the:<br \/>A. sole proprietorship.<br \/>B. corporation.<br \/>C. partnership.<br \/>D. S corporation.<br \/>52. From the perspective of access to capital, the best form of business organization is the:<br \/>A. sole proprietorship.<br \/>B. corporation.<br \/>C. partnership.<br \/>D. S corporation.<br \/>53. From the perspective of ownership risk, the best form of business organization is the:<br \/>A. sole proprietorship.<br \/>B. corporation.<br \/>C. partnership.<br \/>D. S corporation.<br \/>54. From the perspective of control, the best form of business organization is the:<br \/>A. sole proprietorship.<br \/>B. corporation.<br \/>C. partnership.<br \/>D. S corporation.<br \/>55. Which of the following statements is incorrect?<br \/>A. Partnerships have unlimited liability.<br \/>B. Most sole proprietors raise money by borrowing from banks.<br \/>C. An advantage of sole proprietorships is that the owner has complete control.<br \/>D. S corporations are considered a hybrid organization.<br \/>56. Which statement is incorrect regarding hybrid organizations?<br \/>A. They offer single taxation.<br \/>B. They offer limited risk to the owners.<br \/>C. They offer the same type of control as a sole proprietorship.<br \/>D. All of these answers are correct statements.<br \/>57. Agency problems exist in which forms of business ownership?<br \/>A. Sole proprietorship<br \/>B. S corporation<br \/>C. Partnership<br \/>D. Corporation<br \/>58. Methods to minimize agency problem include all EXCEPT:<br \/>A. offer the managers an equity stake in the firm.<br \/>B. award the CEO stock options.<br \/>C. allow the CEO to purchase stock via an employee stock option plan.<br \/>D. allow the CEO to purchase bonds via an employee bond option plan.<br \/>59. All of the following are an example of a fiduciary relationship EXCEPT:<br \/>A. a bank employee manages deposits.<br \/>B. a financial advisor advises her clients.<br \/>C. a CEO manages the firm.<br \/>D. the shareholder elects a board member.<br \/>60. Restricted stock is:<br \/>A. a special type of stock that is not transferable from the current holder to others until specific<br \/>conditions are satisfied.<br \/>B. a special type of stock that can be converted into corporate bonds after a specific amount of<br \/>time has elapsed.<br \/>C. a special type of stock that is a result of offering an employee stock ownership plan.<br \/>D. None of these answers is correct.<br \/>61. The board of directors:<br \/>A. are hired by the CEO.<br \/>B. are elected by shareholders.<br \/>C. have unlimited liability since they oversee the day-to-day operations of the firm.<br \/>D. are employed by the Securities Exchange Commission to ensure its rules and regulations<br \/>have been met.<br \/>62. Which of these does NOT act as a monitor of how the firm is being run outside the firm?<br \/>A. Auditors<br \/>B. Analysts<br \/>C. Credit rating agencies<br \/>D. Members of the board of directors<br \/>63. An angel investor differs from a venture capitalist because of the:<br \/>A. type of investment.<br \/>B. investment time frame.<br \/>C. size of investment.<br \/>D. voting rights.<br \/>64. Corporate stakeholders include all of the following EXCEPT:<br \/>A. employees.<br \/>B. shareholders.<br \/>C. suppliers.<br \/>D. auditors.<br \/>65. What is the difference in perspective between finance and accounting?<br \/>A. Timing<br \/>B. Risk<br \/>C. Liability<br \/>D. Ownership<br \/>66. Which of the following statements is correct?<br \/>A. Accountants are focused on what happened in the past.<br \/>B. Financial managers are focused on what happened in the past.<br \/>C. Both accountants and financial managers use total quality management systems to<br \/>standardize data.<br \/>D. Financial managers double-check the accountant&#8217;s statements.<br \/>67. Which financial statement reports the amounts of cash that the firm generated and distributed<br \/>during a particular time period?<br \/>A. Balance sheet<br \/>B. Income statement<br \/>C. Statement of retained Earnings<br \/>D. Statement of cash Flows<br \/>68. When a firm alters its capital structure to include more or less debt (and, in turn, less or more<br \/>equity), it impacts which of the following?<br \/>A. The residual cash flows available for stock holders<br \/>B. The number of shares of stock outstanding<br \/>C. The earnings per share (EPS)<br \/>D. All of the choices<br \/>69. These are cash inflows and outflows associated with buying and selling of fixed or other longterm<br \/>assets.<br \/>A. Cash flows from operations<br \/>B. Cash flows from investing activities<br \/>C. Cash flows from financing activities<br \/>D. Net change in cash and cash equivalents<br \/>70. If a company reports a large amount of net income on its income statement during a year, the firm<br \/>will have:<br \/>A. positive cash flow.<br \/>B. negative cash flow.<br \/>C. zero cash flow.<br \/>D. Any of these scenarios are possible.<br \/>71. Income Statement Consider a firm with an EBIT of $500,000. The firm finances its assets with<br \/>$2,000,000 debt (costing 6 percent) and 50,000 shares of stock selling at $20.00 per share. To<br \/>reduce the firm&#8217;s risk associated with this financial leverage, the firm is considering reducing its<br \/>debt by $1,000,000 by selling an additional 50,000 shares of stock. The firm is in the 40 percent<br \/>tax bracket. The change in capital structure will have no effect on the operations of the firm. Thus,<br \/>EBIT will remain $500,000. What is the change in the firm&#8217;s EPS from this change in capital<br \/>structure?<br \/>A. Decrease EPS by $1.68<br \/>B. Decrease EPS by $1.92<br \/>C. Decrease EPS by $3.20<br \/>D. Increase EPS by $0.72<br \/>72. Statement of Retained Earnings Night Scapes, Corp. began the year 2013 with $10 million in<br \/>retained earnings. The firm suffered a net loss of $2 million in 2013 and yet paid $2 million to its<br \/>preferred stockholders and $1 million to its common stockholders. What is the year-end 2013<br \/>balance in retained earnings for Night Scapes?<br \/>A. $5 million<br \/>B. $8 million<br \/>C. $9 million<br \/>D. $15 million<br \/>73. Statement of Retained Earnings Use the following information to find dividends paid to common<br \/>stockholders during 2013.<br \/>A. $3 million<br \/>B. $4 million<br \/>C. $10 million<br \/>D. $17 million<br \/>74. Income Statement You have been given the following information for Romeo&#8217;s Rockers Corp.:<br \/>Net sales = $5,200,000;<br \/>Cost of goods sold = $2,100,000;<br \/>Addition to retained earnings = $1,000,000;<br \/>Dividends paid to preferred and common stockholders = $400,000;<br \/>Interest expense = $200,000.<br \/>The firm&#8217;s tax rate is 30 percent. What is the depreciation expense for Romeo&#8217;s Rockers Corp.?<br \/>A. $900,000<br \/>B. $1,100,000<br \/>C. $1,500,000<br \/>D. $1,600,000<br \/>75. Income Statement You have been given the following information for Nicole&#8217;s Neckties Corp.:<br \/>Net sales = $2,500,000;<br \/>Cost of goods sold = $1,300,000;<br \/>Addition to retained earnings = $30,000;<br \/>Dividends paid to preferred and common stockholders = $300,000;<br \/>Interest expense = $50,000.<br \/>The firm&#8217;s tax rate is 40 percent. What is the depreciation expense for Nicole&#8217;s Neckties Corp.?<br \/>A. $550,000<br \/>B. $600,000<br \/>C. $650,000<br \/>D. $820,000<br \/>76. Income Statement You have been given the following information for Kaye&#8217;s Krumpet Corp.:<br \/>Net sales = $150,000;<br \/>Gross profit = $100,000;<br \/>Addition to retained earnings = $20,000;<br \/>Dividends paid to preferred and common stockholders = $8,000;<br \/>Depreciation expense = $50,000.<br \/>The firm&#8217;s tax rate is 30 percent. What are the cost of goods sold and the interest expense for<br \/>Kaye&#8217;s Krumpet Corp.?<br \/>A. $10,000, and $50,000, respectively<br \/>B. $50,000, and $10,000, respectively<br \/>C. $50,000, and $22,000, respectively<br \/>D. $62,000, and $10,000, respectively<br \/>77. Income Statement You have been given the following information for Ross&#8217;s Rocket Corp.:<br \/>Net sales = $1,000,000;<br \/>Gross profit = $400,000;<br \/>Addition to retained earnings = $60,000;<br \/>Dividends paid to preferred and common stockholders = $90,000;<br \/>Depreciation expense = $50,000.<br \/>The firm&#8217;s tax rate is 40 percent. What are the cost of goods sold and the interest expense for<br \/>Ross&#8217;s Rocket Corp.?<br \/>A. $100,000, and $600,000, respectively<br \/>B. $600,000, and $100,000, respectively<br \/>C. $600,000, and $200,000, respectively<br \/>D. $700,000, and $100,000, respectively<br \/>78. Corporate Taxes The AOK Corporation had a 2013 taxable income of $2,200,000 from<br \/>operations after all operating costs but before<br \/>(1) interest charges of $90,000,<br \/>(2) dividends received of $750,000,<br \/>(3) dividends paid of $80,000, and<br \/>(4) income taxes.<br \/>Using the tax schedule in Table 2.3, what is AOK&#8217;s income tax liability?<br \/>What are AOK&#8217;s average and marginal tax rates on taxable income from operations?<br \/>A. $793,900, 34%, 34%, respectively<br \/>B. $793,900, 36.0864%, 34%, respectively<br \/>C. $972,400, 34%, 34%, respectively<br \/>D. $972,400, 44.2%, 34%, respectively<br \/>79. Statement of Cash Flows Fina&#8217;s Faucets, Inc. has net cash flows from operating activities for the<br \/>last year of $17 million. The income statement shows that net income is $15 million and<br \/>depreciation expense is $6 million. During the year, the change in inventory on the balance sheet<br \/>was an increase of $4 million, change in accrued wages and taxes was an increase of $1 million<br \/>and change in accounts payable was an increase of $1 million. At the beginning of the year the<br \/>balance of accounts receivable was $5 million. What was the end of year balance for accounts<br \/>receivable?<br \/>A. $2 million<br \/>B. $3 million<br \/>C. $7 million<br \/>D. $9 million<br \/>80. Statement of Cash Flows Crispy Corporation has net cash flow from financing activities for the<br \/>last year of $20 million. The company paid $5 million in dividends last year. During the year, the<br \/>change in notes payable on the balance sheet was an increase of $2 million, and change in<br \/>common and preferred stock was an increase of $3 million. The end of year balance for long-term<br \/>debt was $45 million. What was their beginning of year balance for long-term debt?<br \/>A. $15 million<br \/>B. $20 million<br \/>C. $25 million<br \/>D. $35 million<br \/>81. Reed&#8217;s Birdie Shot, Inc.&#8217;s 2013 income statement lists the following income and expenses: EBIT<br \/>= $550,000, interest expense = $43,000, and net income = $300,000. Calculate the 2013 taxes<br \/>reported on the income statement.<br \/>A. $85,000<br \/>B. $107,000<br \/>C. $309,000<br \/>D. $207,000<br \/>82. Reed&#8217;s Birdie Shot, Inc.&#8217;s 2013 income statement lists the following income and expenses: EBIT<br \/>= $555,000, interest expense = $178,000, and taxes = $148,000. Reed&#8217;s has no preferred stock<br \/>outstanding and 100,000 shares of common stock outstanding. Calculate the 2013 earnings per<br \/>share.<br \/>A. $3.49<br \/>B. $2.29<br \/>C. $3.14<br \/>D. $2.79<br \/>83. You have been given the following information for Corky&#8217;s Bedding Corp.:<br \/>Net sales = $15,250,000;<br \/>Cost of goods sold = $5,750,000;<br \/>Addition to retained earnings = $4,000,000;<br \/>Dividends paid to preferred and common stockholders = $995,000;<br \/>Interest expense = $1,150,000.<br \/>The firm&#8217;s tax rate is 30 percent. Calculate the depreciation expense for Corky&#8217;s Bedding Corp.<br \/>A. $1,210,000<br \/>B. $1,970,000<br \/>C. $1,520,000<br \/>D. $1,725,000<br \/>84. The 2011 income statement for Duffy&#8217;s Pest Control shows that depreciation expense is $180<br \/>million, EBIT is $420 million, EBT is $240 million, and the tax rate is 30 percent. At the beginning<br \/>of the year, the balance of gross fixed assets was $1,500 million and net operating working<br \/>capital was $500 million. At the end of the year gross fixed assets was $1,803 million. Duffy&#8217;s free<br \/>cash flow for the year was $425 million. Calculate the end of year balance for net operating<br \/>working capital.<br \/>A. $403 million<br \/>B. $300 million<br \/>C. $203 million<br \/>D. $103 million<br \/>85. Is it possible for a firm to have positive net income and yet to have cash flow problems?<br \/>A. No, this is impossible since net income increases the firm&#8217;s cash.<br \/>B. Yes, this can occur when a firm is growing very rapidly.<br \/>C. Yes, this is possible if the firm window-dressed its financial statements.<br \/>D. No, this is impossible since net income and cash are highly correlated.<br \/>86. Cash flows available to pay the firm&#8217;s stockholders and debt holders after the firm has made the<br \/>necessary working capital investments, fixed asset investments, and developed the necessary<br \/>new products to sustain the firm&#8217;s ongoing operations is referred to as:<br \/>A. operating cash flow.<br \/>B. net operating working capital.<br \/>C. free cash flow.<br \/>D. None of the above.<br \/>87. Which of the following is an example of a capital structure?<br \/>A. 15 percent current assets and 85 percent fixed assets<br \/>B. 10 percent current liabilities and 90 percent long-term debt<br \/>C. 20 percent debt and 80 percent equity<br \/>D. None of the above<br \/>88. Which of the following statements is correct?<br \/>A. The bottom line on the statement of cash flows equals the change in the retained earnings on<br \/>the balance sheet.<br \/>B. The reason the statement of cash flows is important is because cash is what pays the firm&#8217;s<br \/>obligations, not accounting profit.<br \/>C. If a firm has accounting profit, its cash account will always increase.<br \/>D. All of these statements are correct.<br \/>89. Which of the following activities will increase a firm&#8217;s current ratio?<br \/>A. Purchase inventory using cash<br \/>B. Buy equipment with a short-term bank loan<br \/>C. Accrued wages and taxes increase<br \/>D. None of these statements will increase a firm&#8217;s current ratio<br \/>90. A firm reported year-end sales of $20 million. It listed $7 million of inventory on its balance sheet.<br \/>Using a 365-day year, how many days did the firm&#8217;s inventory stay on the premises?<br \/>A. 127.75 days<br \/>B. 157.75 days<br \/>C. 97.75 days<br \/>D. 87.75 days<br \/>91. To interpret financial ratios, managers, analysts, and investors use which of the following type of<br \/>benchmarks?<br \/>A. Competitive analysis<br \/>B. Cross-industry analysis<br \/>C. Time-industry analysis<br \/>D. Time series analysis<br \/>92. Which is true? Ratio analysis:<br \/>A. can provide useful information on a firm&#8217;s current position but should never be used to forecast<br \/>future performance.<br \/>B. can provide useful information on a firm&#8217;s current position and hint at future performance.<br \/>C. can provide useful information on a firm&#8217;s past but not current position.<br \/>D. can provide useful information on a firm&#8217;s past and current position, but should never be used<br \/>to forecast future performance.<br \/>93. Which of the following statements is correct?<br \/>A. The cash ratio measures a firm&#8217;s ability to pay long-term debt with its available cash and<br \/>marketable securities.<br \/>B. Holding extremely high levels of liquidity to guard against liquidity crises is an inappropriate<br \/>goal for the firm.<br \/>C. The quick (or acid-test) ratio measures a firm&#8217;s ability to pay off short-term obligations with<br \/>long-term debt.<br \/>D. The current ratio is a more stringent measure of liquidity than the quick (or acid-test) ratio.<br \/>94. A strong liquidity position means that:<br \/>A. the firm is able to meet its short-term obligations.<br \/>B. the firm uses little debt in its capital structure.<br \/>C. the firm pays out a large portion of its net income in the form of dividends.<br \/>D. the firm pays its creditors on time.<br \/>95. Which type of ratio measures the dollars of current assets available to pay each dollar of current<br \/>liabilities?<br \/>A. Cross-section<br \/>B. Current<br \/>C. Internal-growth<br \/>D. Quick or acid test<br \/>96. Which statement is true?<br \/>A. The less liquid assets a firm holds, the less likely it is that the firm will experience financial<br \/>distress.<br \/>B. The lower the liquidity ratios, the less liquidity risk a firm has.<br \/>C. Liquid assets generate profits for the firm.<br \/>D. Extremely high levels of liquidity guard against liquidity crises, but at the cost of lower returns<br \/>on assets.<br \/>97. Liquidity Ratios Ernie&#8217;s Mufflers has current liabilities of $45 million. Cash makes up 5 percent of<br \/>the current assets and accounts receivable makes up another 50 percent of current assets.<br \/>Ernie&#8217;s current ratio = 1.5 times. What is the value of inventory listed on the firm&#8217;s balance sheet?<br \/>A. $13.75m<br \/>B. $20.25m<br \/>C. $30.375m<br \/>D. $33.75m<br \/>98. DuPont Analysis If Epic, Inc. has an ROE = 25 percent, equity multiplier = 4, a profit margin of 12<br \/>percent, what is the total asset turnover ratio?<br \/>A. 0.0833<br \/>B. 0.192<br \/>C. 0.5208<br \/>D. 0.75<br \/>99. DuPont Analysis If Apex, Inc. has an ROE = 10 percent, equity multiplier = 3, and profit margin of<br \/>5 percent, what is the total asset turnover ratio?<br \/>A. 0.0600<br \/>B. 0.0667<br \/>C. 0.1667<br \/>D. 0.6667<br \/>100.DuPont Analysis Last year Caf\u00e9 Creations, Inc. had an ROA of 25 percent, a profit margin of 12<br \/>percent, and sales of $4 million. What is Caf\u00e9 Creations&#8217; total assets?<br \/>A. $0.12m<br \/>B. $0.48m<br \/>C. $1.00m<br \/>D. $1.92m<br \/>101.DuPont Analysis Last year Mocha Java, Inc. had an ROA of 10 percent, a profit margin of 5<br \/>percent, and sales of $25 million. What is Mocha Java&#8217;s total assets?<br \/>A. $0.125m<br \/>B. $1.25m<br \/>C. $12.5m<br \/>D. $12m<br \/>102.Internal Growth Rate Last year Umbrellas Unlimited Corporation had an ROA of 10 percent and a<br \/>dividend payout ratio of 50 percent. What is the internal growth rate?<br \/>A. 1.00 percent<br \/>B. 2.25 percent<br \/>C. 5.26 percent<br \/>D. 100.00 percent<br \/>103.Internal Growth Rate Last year Rain Repel Corporation had an ROA of 5 percent and a dividend<br \/>payout ratio of 90 percent. What is the internal growth rate?<br \/>A. 4.75 percent<br \/>B. 0.50 percent<br \/>C. 50.00 percent<br \/>D. 52.63 percent<br \/>104.Internal Growth Rate Last year Poncho Villa Corporation had an ROA of 16 percent and a<br \/>dividend payout ratio of 25 percent. What is the internal growth rate?<br \/>A. 1.19 percent<br \/>B. 13.64 percent<br \/>C. 25.40 percent<br \/>D. 33.33 percent<br \/>105.Sustainable Growth Rate Last year Umbrellas Unlimited Corporation had an ROE of 16.5 percent<br \/>and a dividend payout ratio of 40 percent. What is the sustainable growth rate?<br \/>A. 13.17 percent<br \/>B. 10.99 percent<br \/>C. 27.50 percent<br \/>D. 32.93 percent<br \/>106.Sustainable Growth Rate Last year Rain Repel Corporation had an ROE of 10 percent and a<br \/>dividend payout ratio of 80 percent. What is the sustainable growth rate?<br \/>A. 1.11 percent<br \/>B. 2.04 percent<br \/>C. 44.44 percent<br \/>D. 50.00 percent<br \/>107.Market Value Ratios Lab R Doors&#8217; year-end price on its common stock is $40. The firm has a<br \/>profit margin of 10 percent, total assets of $30 million, a total asset turnover ratio of 2, no<br \/>preferred stock, and there are 4 million shares of common stock outstanding. What is the PE<br \/>ratio for Lab R Doors?<br \/>A. 0.375<br \/>B. 0.750<br \/>C. 6.667<br \/>D. 26.667<br \/>108.Market Value Ratios Fancy Paws&#8217; year-end price on its common stock is $20. The firm has a<br \/>profit margin of 12 percent, total assets of $20 million, a total asset turnover ratio of 0.5, no<br \/>preferred stock, and there are 2 million shares of common stock outstanding. What is the PE<br \/>ratio for Fancy Paws?<br \/>A. 3.33<br \/>B. 8.33<br \/>C. 10.00<br \/>D. 33.33<br \/>109.DuPont Analysis You are considering investing in Totally Tire Services. You have been able to<br \/>locate the following information on the firm: total assets = $50 million, accounts receivable = $10<br \/>million, ACP = 15 days, net income = $4.5 million, and debt-to-equity ratio = 0.75 times. What is<br \/>the ROE for the firm?<br \/>A. 1.58 percent<br \/>B. 9.00 percent<br \/>C. 15.75 percent<br \/>D. 28.81 percent<br \/>110.DuPont Analysis You are considering investing in Lenny&#8217;s Lube, Inc. You have been able to<br \/>locate the following information on the firm: total assets = $20 million, accounts receivable = $6<br \/>million, ACP = 20 days, net income = $5 million, and debt-to-equity ratio = 2.5 times. What is the<br \/>ROE for the firm?<br \/>A. 2.5000 percent<br \/>B. 13.9882 percent<br \/>C. 35.0000 percent<br \/>D. 87.50 percent<br \/>111.Internal Growth Rate Leash N Collar reported a profit margin of 8 percent, total asset turnover<br \/>ratio of 1.5 times, debt-to-equity ratio of 0.75 times, net income of $400,000, and dividends paid<br \/>to common stockholders of $200,000. The firm has no preferred stock outstanding. What is<br \/>Leash N Collar&#8217;s internal growth rate?<br \/>A. 5.2632 percent<br \/>B. 7.3333 percent<br \/>C. 8.6956 percent<br \/>D. 6.383 percent<br \/>112.Internal Growth Rate Saddle and Bridle reported a profit margin of 12 percent, total asset<br \/>turnover ratio of 2 times, debt-to-equity ratio of 1.9 times, net income of $1 million, and dividends<br \/>paid to common stockholders of $250,000. The firm has no preferred stock outstanding. What is<br \/>Saddle and Bridle&#8217;s internal growth rate?<br \/>A. 13.64 percent<br \/>B. 18.00 percent<br \/>C. 24.00 percent<br \/>D. 21.95 percent<br \/>113.Sustainable Growth Rate You have located the following information on Rock Company: debt<br \/>ratio = 40 percent, capital intensity ratio = 2.25 times, profit margin = 8 percent, and dividend<br \/>payout ratio = 25 percent. What is the sustainable growth rate for Rock?<br \/>A. 3.56 percent<br \/>B. 6.00 percent<br \/>C. 4.65 percent<br \/>D. 8.00 percent<br \/>114.Sustainable Growth Rate You have located the following information on Greenwich Company:<br \/>debt ratio = 60 percent, capital intensity ratio = 0.75 times, profit margin = 13.5 percent, and<br \/>dividend payout ratio = 80 percent. What is the sustainable growth rate for Greenwich?<br \/>A. 2.70 percent<br \/>B. 10.80 percent<br \/>C. 25.00 percent<br \/>D. 9.89 percent<br \/>115.Sustainable Growth Rate You have located the following information on Maize Company: debt<br \/>ratio = 20 percent, capital intensity ratio = 1.25 times, profit margin = 12 percent, and dividend<br \/>payout ratio = 10 percent. What is the sustainable growth rate for Maize?<br \/>A. 1.20 percent<br \/>B. 10.10 percent<br \/>C. 12.11 percent<br \/>D. 73.26 percent<br \/>116.Sustainable Growth Rate You have located the following information on Tyler Company: debt<br \/>ratio = 50 percent, capital intensity ratio = 1.5 times, profit margin = 9 percent, and dividend<br \/>payout ratio = 40 percent. What is the sustainable growth rate for Tyler?<br \/>A. 12.00 percent<br \/>B. 7.76 percent<br \/>C. 20.00 percent<br \/>D. 30.00 percent<br \/>117.A firm has a profit margin of 12 percent; total asset turnover of 0.55 and an equity multiplier of<br \/>2.2. What is the firm&#8217;s ROA and ROE?<br \/>A. ROA = 6.6 percent; ROE = 14.52 percent<br \/>B. ROA = 7.2 percent; ROE = 15.84 percent<br \/>C. ROA = 9.5 percent; ROE = 20.9 percent<br \/>D. ROA = 8.1 percent; ROE = 17.82 percent<br \/>118.A firm reported sales of $10 million. It had a debt ratio of 40 percent and total debt amounted to<br \/>$3 million. What was the firm&#8217;s capital intensity ratio?<br \/>A. 1.25 times<br \/>B. 2.02 times<br \/>C. 0.40 times<br \/>D. 0.75 times<br \/>119.You are considering a stock investment in one of two firms (A and B), both of which operate in<br \/>the same industry. A finances its $20 million in assets with $18 million in debt and $2 million in<br \/>equity. B finances its $20 million in assets with $2 million in debt and $18 million in equity.<br \/>Calculate the equity multiplier for the two firms.<br \/>A. Firm A: 15 times; Firm B: 1.00 times<br \/>B. Firm A: 10 times; Firm B: 1.11 times<br \/>C. Firm A: 10 times; Firm B: 9.99 times<br \/>D. Firm A: 20 times; Firm B: 1.11 times<br \/>120.Common-size financial statements:<br \/>A. allow for an easy comparison of balance sheets and income statements across firms in the<br \/>industry.<br \/>B. provide quantitative clues about the direction that the firm is moving.<br \/>C. are obtained by dividing all income statement accounts by net sales and all balance sheet<br \/>accounts by total assets.<br \/>D. All of these describe common-size financial statements.<br \/>121.A firm reported a profit margin of 8.5 percent, total asset turnover of 0.85 times, debt-to-equity<br \/>ratio of 0.90 times, net income of $550,000, and dividends paid to common stockholders of<br \/>$100,000. The firm has no preferred stock outstanding. What is the firm&#8217;s internal growth rate?<br \/>A. 3.61 percent<br \/>B. 6.29 percent<br \/>C. 5.91 percent<br \/>D. 11.04 percent<br \/>122.A firm has a debt ratio of 45 percent, capital intensity ratio is 1.3 times, profit margin is 10<br \/>percent, and dividend payout ratio is 30 percent. Calculate the sustainable growth rate for the<br \/>firm.<br \/>A. 1.56 percent<br \/>B. 2.96 percent<br \/>C. 3.05 percent<br \/>D. 4.79 percent<br \/>123.A firm reported an ROE of 19 percent. The firm&#8217;s debt ratio was 45 percent, sales were $12<br \/>million, and the capital intensity ratio was 1.1 times. Calculate the net income for the firm.<br \/>A. 0.34 million<br \/>B. 1.38 million<br \/>C. 1.93 million<br \/>D. 2.06 million<br \/>124.Firm A and Firm B have the same total assets, ROA and profit margin (greater than 0). However,<br \/>Firm B has a higher debt ratio and interest expense than Firm A. Which of the following<br \/>statements is correct?<br \/>A. Firm B must have a higher ROE than firm A.<br \/>B. Firm B must have a higher capital intensity ratio than Firm A.<br \/>C. Firm B must have a higher fixed asset turnover than Firm A.<br \/>D. Firm B must have a lower ACP than Firm A.<br \/>125.A firm has an ROE of 14 percent and a debt ratio of 40 percent. If the total asset turnover is 3.4,<br \/>what is the firm&#8217;s profit margin?<br \/>A. 2.94 percent<br \/>B. 3.86 percent<br \/>C. 4.29 percent<br \/>D. 5.67 percent<br \/>126.What is the debt ratio for a firm with an equity multiplier of 3.5?<br \/>A. 44.09 percent<br \/>B. 58.51 percent<br \/>C. 66.25 percent<br \/>D. 71.43 percent<br \/>127.A firm has an ROA of 12 percent and an ROE of 52 percent. What is the firm&#8217;s equity multiplier?<br \/>A. 0.23<br \/>B. 4.33<br \/>C. 1.63<br \/>D. 2.90<br \/>128.The maximum growth rate that can be achieved financing asset growth with new debt and<br \/>retained earnings is called the:<br \/>A. internal growth rate.<br \/>B. retention rate.<br \/>C. sustainable growth rate.<br \/>D. operating expansion rate.<br \/>129.The maximum growth rate that can be achieved by financing asset growth with internal financing<br \/>or retained earnings is called the:<br \/>A. internal growth rate.<br \/>B. retention rate.<br \/>C. sustainable growth rate.<br \/>D. operating expansion rate.<\/p>\n<p>130.The term &#8220;spreading the financial statements&#8221; refers to:<br \/>A. creating common-size financial statements.<br \/>B. comparing the statements to the industry average.<br \/>C. calculating the internal and sustainable growth rate.<br \/>D. evaluating the debt levels.<br \/>Summary<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>BFIN 3321 Review1. In the financial crisis that started in 2006, a significant indicator of the U.S. economic declinewas:A. a significant drop in interest rates.B. a sharp increase in unregulated Ponzi-type security sales.C. rising defaults by subprime mortgage borrowers.D. a large increase in loan default due to unemployment.2. The financial crisis that started in 2006 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-47571","post","type-post","status-publish","format-standard","hentry","category-education"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/47571","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=47571"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/47571\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=47571"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=47571"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=47571"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}