- Description
FIN 370T Wk 1 – Apply: Homework
This subarea of finance helps facilitate the capital flows between investors and companies.
Multiple Choice
- financial institutions and markets
- treasury management
- investments
- financial management
The portion of a company’s profits that are kept by the company rather than distributed to the stockholders as cash dividends is referred to as
Multiple Choice
- venture capital.
- institutional investment.
- retained earnings.
- restricted earnings.
This subarea of finance looks at firm decisions in acquiring and utilizing cash received from investors or from retained earnings.
Multiple Choice
- financial management
- investments
- treasury management
This is a general term for securities like stocks, bonds, and other assets that represent ownership in a cash flow.
Multiple Choice
- financial markets
- investment
- financial asset
- real asset
This type of business organization is relatively easy to start, and it is subject to much lighter regulatory and paperwork burden than other business forms.
Multiple Choice
- partnership
- corporation
- hybrid organization
- sole proprietorship
Which of these is the system of incentives and monitors that tries to overcome the agency problem?
Multiple Choice
- corporate Governance
- checks and Balances
- board of Directors
- Security Exchange Commission
From the perspective of access to capital, the best form of business organization is the
Multiple Choice
- corporation.
- sole proprietorship.
- S corporation.
- partnership.
The board of directors
Multiple Choice
- are employed by the Securities Exchange Commission to ensure its rules and regulations have been met.
- have unlimited liability since they oversee the day-to-day operations of the firm.
- are elected by shareholders.
- are hired by the CEO.
The agency relationship in corporate finance occurs
Multiple Choice
- when the board of directors oversee the CEO.
- when the corporate hires an advertising agency to market their new product or service.
- when the board of directors are elected to staggered terms.
- when the shareholders hire a manager to run their company.
Which of the following statements is in?
Multiple Choice
- Sole proprietorships are subject to less regulation.
- Shareholders are responsible for paying off the corporate bonds in the event of a bankruptcy.
- Both angel investors and venture capitalists exchange capital for ownership.
- All of these choices are .
Which of the following statements is ?
Multiple Choice
- It is relatively easy for sole proprietorships to raise money.
- If the sole proprietorship gets sued, the owner is not liable.
- Sole proprietorships are easy to start.
- Profits from the sole proprietorship are subject to double taxation.
An employee stock option plan is
Multiple Choice
- a plan that only partnerships can use to defer compensation to partners.
- a way to align the interests of employees with those of the owners.
- a perk usually only given to the board of directors as compensation.
All of the following are an example of a fiduciary relationship EXCEPT
Multiple Choice
- a CEO manages the firm.
- a financial advisor advises her clients.
- a bank employee manages deposits.
- the shareholder elects a board member.
Which of the following is not an impact of the slowdown occurring in China’s economy?
Multiple Choice
- money going out of Manhattan, New York
- real estate market declining in Sydney, Australia
- lower demand in materials such as steel, iron ore, and copper
- falling community prices
A firm reported year-end sales of $20 million. It listed $7 million of inventory on its balance sheet. Using a 365-day year, how many days did the firm’s inventory stay on the premises?
Multiple Choice
- 157.75 days
- 127.75 days
- 87.75 days
- 97.75 days
Which ratio measures how many days inventory is held before the final product is sold?
Multiple Choice
- inventory intensity ratio
- total asset turnover
- inventory turnover
- days’ sales in inventory
Which of the following ratios measure how efficiently a firm uses its assets, as well as how efficiently the firm manages its accounts payable?
Multiple Choice
- asset management
- internal-growth
- cash
- quick or acid-test
Which of these ratios measure the extent to which the firm uses debt (or financial leverage) versus equity to finance its assets?
Multiple Choice
- financial ratios
- equity ratios
- liquidity ratios
- debt management ratios
A firm has EBIT of $300,000 and depreciation expense of $12,000. Fixed charges total $44,000. Interest expense totals $7,000. What is the firm’s cash coverage ratio?
Multiple Choice
- 3.76 times
- 7.09 times
- 7.25 times
- 4.91 times
Which ratio assesses how efficiently a firm uses its fixed assets?
Multiple Choice
- average collection period
- fixed asset turnover
- current ratio
- capital intensity ratio
Which of these is NOT considered a coverage ratio?
Multiple Choice
- current ratio
- fixed-charge coverage ratio
- times interest earned
- cash coverage ratio
Trina’sTrikes, Inc. reported a debt-to-equity ratio of 2 times at the end of 2018. If the firm’s total debt at year-end was $10 million, how much equity does Trina’s Trikes have?
Multiple Choice
- $5 million
- $2 million
- $10 million
- $20 million
CornProducts Corp. ended the year 2018 with an average collection period of 40 days. The firm’s credit sales for 2018 were $9 million. What is the approximate year-end 2018 balance in accounts receivable for Corn Products?
rev: 03_30_2019_QC_CS-164558
Multiple Choice
- $986,300
- $4,444,400
- $225,000
- $360,000,000
Which of the following measures the number of days that the firm holds accounts payable before it has to extend cash to buy raw materials?
Multiple Choice
- average payment period
- accounts payable turnover
- accounts receivable turnover
- average collection period
Which ratio measures the overall return on the firm’s assets including financial leverage and taxes?
Multiple Choice
- ROA
- ROE
- basic earning power
- profit margin
Which of these ratios show the combined effects of liquidity, asset management, and debt management on the overall operation results of the firm?
Multiple Choice
- liquidity
- coverage
- financial
- profitability
Tina’s Track Supply’s market-to-book ratio is currently 4.5 times and PE ratio is 10.5 times. If Tina’s Track Supply’s common stock is currently selling at $100 per share, what is the book value per share and earnings per share?
Multiple Choice
- $1,050, $450, respectively
- $22.2222, $9.5238, respectively
- $450, $1,050, respectively
- $9.5238, $22.2222, respectively
Which of the following statements is ?
Multiple Choice
- To interpret financial ratios, users should analyze the performance of the firm over time and the performance of the firm against one or more companies in the same industry.
- Performing cross-sectional analysis is easy since industries are usually clustered with firms that are identical.
- Time-series analysis is useless in assessing improvement or deterioration of ratios since the data is historical.
- Performing cross-sectional ratio analysis refers to assessing how a firm performed over a certain section of time.
Last year Rain Repel Corporation had an ROA of 5 percent and a dividend payout ratio of 90 percent. What is the internal growth rate?
Multiple Choice
- 0.50 percent
- 50.00 percent
- 52.63 percent
- 4.75 percent
Which is true? Ratio analysis
Multiple Choice
- can provide useful information on a firm’s current position but should never be used to forecast future performance.
- can provide useful information on a firm’s current position and hint at future performance.
- can provide useful information on a firm’s past and current position, but should never be used to forecast future performance.
- can provide useful information on a firm’s past but not current position.