Finance Part one: Multiple choice questions please place the letter of the correct answer in the corresponding box on the answer sheet that follows these questions. Questions 1- 28 are worth 1.5 points each. 1. Zinger Corporation has declared a stockdividend that pays one share of stock for every 20 shares owned…
2. A firm that uses RADR to evaluate investment projects would be most likely to apply the highest risk-adjusted discount rate to which of the following projects? a) The overhaul and repair of a large piece of machinery that it has been using for five years. b) An investment in a new piece of machinery to produce new products to be sold in China. c) An investment in a fleet of trucks to be used for delivery of its products. d) An investment in a new machine that will be used to improve the production process for one of its more successful products it has been producing for about 7 years. 3. A corporate bond with ten years to maturity pays $45 interest semi-annually. If the current market rate of interest on bonds in the same risk class is 9 percent; this bond will be selling for: a) Much less than $1000 b) Much more than $1000 c) Approximately $1000 d) There is not enough information here to be able to determine the answer to this question. 4. You have just calculated the NPV on an investment. It is a negative ($3.33). The IRR on this investment is: a) Equal to the cost of capital b) Higher than the cost of capital c) Lower than the cost of capital d) There is not enough information here to be able to figure out the answer to this question. 5. A firm has daily remittances (collections) of two million dollars and can earn 9 percent on investments of surplus cash. The maximum this firm should pay for a cash management system that will reduce collection time by three days is: a) $5,400,000 b) $1,800,000 c) $540,000 d) $180,000 e) $3,000,000 6. Which of the following courses of action in regard to financing working capital would be taken by a firm, wishing to take moderate risk and earn a moderate profit? a) Long-term financing and a relatively low level of liquid current assets. b) Long-term financing and a relatively high level of liquid current assets. c) Short-term financing and a relatively low level of liquid current assets. d) None of the above represents a position of moderate risk and moderate profits. 7. A firm does not maintain a single, exact, debt/equity ratio at all times because: a) It will want to sell debt when interest rates are low and sell common stock when stock prices are high. b) It will want to take advantage of timing its fund rising in order to minimize the cost of capital over time. c) The “market” allows some leeway in the debt/equity ratio before it begins to penalize the firm with higher required rates of return. d) All of the above help explain why a firm does not maintain a single, exact debt/equity ratio at all times. 8. The relationship between the price of a bond and market interest rates: a) Is a positively correlated linear relationship b) Is an inverse relationship c) Cannot be determined d) Cannot be determined without more information than is presented here. 9. The closer the correlation coefficient between two investment projects is to (-1), the greater is the a) Risk of the “portfolio” when the two projects are combined b) Risk reduction on the “portfolio” when the two projects are combined c) Return on the “portfolio” when the two projects are combined. d) Variation on the “portfolio” returns as compared to the returns on the individual projects. 10. When comparing three investment projects, if the expected cash flows from one project have a higher standard deviation than the cash flows of the other two, which of the follow ...
Cite this document
(“Finance Assignment Example | Topics and Well Written Essays - 1750 words”, n.d.)
Retrieved from https://studentshare.net/other/11214-finance
(Finance Assignment Example | Topics and Well Written Essays - 1750 Words)
“Finance Assignment Example | Topics and Well Written Essays - 1750 Words”, n.d. https://studentshare.net/other/11214-finance.
Problem Statement The changes in the economic conditions as well as the business requirements of the customers of CCL; it may not be able to sustain its profitability for longer period of time and, hence, may default due to constrained cash flows. Problems/Sub-Problems/Issues Following issues have been observed: 1.
Smith – Brown in West Yorkshire – Jool’s Furniture Industries Ltd. The main purpose of this report is to identify and analyse the current position of the company and to develop possible solutions that the company can adopt to improve the current position.
However, it cannot be used for specific projects because each project has it own operating risk. b) Book weights should be used to calculate WACC because the market value is subjective and changes regularly. c) Current (marginal) cost rates should be used because WACC is used mainly to make investment decisions and these decisions depend on expected future cash flow from projects in relation to the cost of new capital.
In an organization the ability to repay the contractual obligations can be accessed through the Balance sheet, which is a statement of Assets and Liabilities of the firm as on a particular date. The Balance Sheet clearly shows the liquidity of the intermediary firm to meet its obligations.
In order to conduct my comparison I will be comparing the figure for 2012 with 2011’s figures. As the UK supermarket sector standings show it is Tesco who have had the advantage over its competitors for the last decade (30.4% share, 3.3% sales rise in 2012) although in recent years this position is beginning to look less unassailable.
The duration of $30 million loan is the weighted average of all the maturities of the bond. But since there is only a single payment for this loan, there would only be a single maturity and hence weighting is not required of its duration. This implies that its
If we never sell more than $1000000, the business will still be worth pursuing. The break even point would still be reached in this case and therefore, any sales below that would still do but not lower than $970000. In case, in order to stay on
Sainsburys Plc., 2013). The three business segments are operated through different store formats like supermarket and convenience stores, Sainsbury’s Bank joint ventures and The British Land Company Plc. joint venture and
The formation of the company had a bearing from the situation of the American household finance. A reflection of the past scenario indicated that many families in America face financial challenges, and they need a business that offers financial
The Federal government has been asking the business community to adhere and comply with all set rules and regulations in the administration of taxes. Tax Solutions Inc. offers revolutionary and professional
12 Pages(3000 words)Assignment
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Assignment on topic Finance for FREE!