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FIN 575 Final Exam Question paper with answers is provided here by
the Transweb E Tutors for free. Study Guide and the online help for the
Class Assignment are also available at the Transweb E Tutors website.
Analysis of budget
profitability
resources
11%
4.10%
2.50%
3.79%
7. For the most recent year, Cals Cats had sales of $380,000, cost of
goods sold of $93,000, depreciation expense of $47,000, and
additions to retained earnings of $61,420. The firm had $52,000 in
interest expense, and 34% tax rate. What were the times interest
earned ratio?
2.2
5.8
4.61
2.8
8. Bobs Garages has sales of $41 million, total assets of $32 million,
and total debt of $11 million. If the profit margin is 12% what is the
return on equity (ROE)?
14%
12%
51%
23.40%
10.
During project planning, the project team creates a work
breakdown structure that details work tasks that must be
completed. The work breakdown structure should include a
budget analysis
11.
The R. M. Senchack Corporation earned an operating profit
margin of 6% based on sales of $11 million and total assets of $6
million last year. What was Senchacks total asset turnover ratio?
0.54
5.4
1.8
12.
Why is the communication plan a crucial factor in project
success?
13.
debt
equity
equity or debt
14.
Part of financial planning for projects involves the
understanding of the inflows and outflows of cash that will be
created by the project. What tool can be used to track these cash
flows?
15.
Stokes, Inc. has net working capital of $7,900, current
liabilities of $5,220, and inventory of $2,000. What is the quick
ratio?
1.89
1.13
1.21
2.1
16.
Debt ratio
Quick ratio
17.
Collateral
Trade credit
Bearer bonds
18.
The sum of the percentage of equity and debt multiplied by
their respective cost is called
19.
Net income
Total assets
20.
Terrys Trash removal has a total debt ratio of 0.45. What is the
firms debt-to-equity ratio?
1.27
0.41
0.82
1.82
21.
An investment in a project should be undertaken only if the
expected return is greater than the
NPV
WACC
payback method
22.
Brenda Smith, Inc. had a gross profit margin (gross profits
sales) of 25% and sales of $9.75 million last year. Seventy-five
percent of the firms sales are on credit and the remainder are cash
sales. Smiths current assets equal $1,550,000, its current liabilities
equal $300,000, and it has $150,000 in cash plus marketable
securities. If Smiths accounts receivable are $562,500, what is its
average collection period?
25 days
32 days
28 days
14 days
23.
You are considering a project with an initial cash outlay of
$160,000 and expected free cash flows of $40,000 at the end of each
year for 6 years. The required rate of return for this project is 10%.
What is the projects payback period?
4 years
4.5 years
6 years
5 years
24.
25.
What is the primary weakness commonly associated with the
use of the payback method to evaluate a proposed investment?
This approach fails to take into account the time factor in the time value of
money.
The payback method is able to recognize cash flows that occur after the
payback period.
26.
Fijisawa, Inc. is considering a major expansion of its product
line and has estimated the following free cash flows associated with
NPV=$66,098, IRR=10.5
NPV=$72,097, IRR=9.5
NPV=$68,663, IRR=10.2
NPV=$69,368, IRR=10
27.
Cost normally falls into the domain of managerial accounting
and has 4 essential proposes. Select the answer that is an essential
function of cost.
28.
Credit cost
Fixed cost
Retail cost
Inventory cost
29.
30.
Stokes, Inc. has net working capital of $7,900, current
liabilities of $5,220, and inventory of $2,000. What is the current
ratio?
2.1
0.77
1.89
1.51
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