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FIN 571 Final Exam August 2017
FIN 571 Final Exam August 2017
1
Which one of the following is an example of a nondiversifiable risk?
·
A well-respected chairman of the Federal Reserve Bank suddenly resigns
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A poorly managed firm suddenly goes out of business due to lack of sales
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A well-respected president of a firm suddenly resigns
·
A key employee suddenly resigns and accepts employment with a key competitor
·
A well-managed firm reduces its work force and automates several jobs
question2
A firm has a debt-equity ratio of .64, a pretax cost of debt of 8.5 percent, and a required return on assets of 12.6 percent. What is the cost of equity if you ignore taxes?
·
15.22%
·
16.38%
·
8.06%
·
11.12%
·
8.55%
question3
Which term defines the tax rate that applies to the next dollar of taxable income earned?
·
Deductible
·
Marginal
·
Average
·
Total
·
Residual
question4
All else held constant, interest rate risk will increase when the time to maturity:
·
Increases or the coupon rate decreases.
·
Decreases or the coupon rate increases.
·
Increases or the coupon rate increases.
·
Decreases or the coupon rate decreases.
·
Decreases and the coupon rate equals zero.
question5
Under the _______ method, the underwriter buys the securities for less than the offering price and accepts the risk of not selling the issue, while under the _______ method, the underwriter does not purchase the shares but merely acts as an agent.
·
Negotiated offer; competitive offer
·
Firm commitment; best efforts
·
Competitive offer; negotiated offer
·
Best efforts; firm commitment
·
Seasoned; unseasoned
question6
The underlying assumption of the dividend growth model is that a stock is worth:
·
An amount computed as the next annual dividend divided by the market rate of return.
·
The present value of the future income that the stock is expected to generate.
·
The same amount to every investor regardless of their desired rate of return.
·
The same amount as any other stock that pays the same current dividend and has the same required rate of return.
·
An amount computed as the next annual dividend divided by the required rate of return.
question7
The excess return you earn by moving from a relatively risk-free investment to a risky investment is called the:
·
Inflation premium.
·
Risk premium.
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Arithmetic average return.
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Time premium.
·
Geometric average return.
question8
Which one of these statements is correct concerning the cash cycle?
·
A positive cash cycle is preferable to a negative cash cycle.
·
Increasing the accounts payable period increases the cash cycle.
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The longer the cash cycle, the more likely a firm will need external financing.
·
The cash cycle can exceed the operating cycle if the payables period is equal to zero.
·
Adopting a more liberal accounts receivable policy will tend to decrease the cash cycle.
question9
Which one of the following statements about preferred stock is true?
·
If preferred dividends are non-cumulative, then preferred dividends not paid in a particular year will be carried forward to the next year.
·
Preferred stock usually has a stated liquidating value of $100 per share.
·
Unlike dividends paid on common stock, dividends paid on preferred stock are a tax-deductible expense.
·
There is no significant difference in the voting rights granted to preferred and common shareholders.
·
Dividends on preferred stock payable during the next twelve months are considered to be a corporate liability.
question10
What is the present value of $6,811 to be received in one year if the discount rate is 6.5 percent?
·
$6,023.58
·
$6,671.13
·
$6,395.31
·
$6,643.29
·
$7,253.72
question11
The market price of a bond increases when the:
·
Coupon rate decreases.
·
Par value decreases.
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Face value decreases.
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Discount rate decreases.
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Coupon is paid annually rather than semiannually.
question12
The process of planning and managing a firm’s long-term assets is called:
·
Capital structure.
·
Financial depreciation.
·
Working capital management.
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Agency cost analysis.
·
Capital budgeting.
question13
The discount rate that makes the net present value of an investment exactly equal to zero is called the:
·
Profitability index.
·
Average accounting return.
·
External rate of return.
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Internal rate of return.
·
Equalizer.
question14
The cash flow resulting from a firm’s ongoing, normal business activities is referred to as the:
·
Cash flow to investors.
·
Operating cash flow.
·
Additions to net working capital.
·
Cash flow to retained earnings.
·
Net capital spending.
question15
Lois is purchasing an annuity that will pay $5,000 annually for 20 years, with the first annuity payment made on the date of purchase. What is the value of the annuity on the purchase date given a discount rate of 7 percent?
·
$66,916.21
·
$54,282.98
·
$56,191.91
·
$52,970.07
·
$56,677.98
question16
Which one of the following statements is false?
·
An aging schedule includes only overdue accounts.
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Investments in accounts receivable equal average daily sales times average collection period.
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Collection efforts may involve legal action.
·
Aging schedules are used to monitor accounts receivable.
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If sales are seasonal, the percentages shown on an aging schedule will vary during the year.
question17
The primary goal of financial management is to:
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Minimize operational costs and maximize firm efficiency.
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Maximize current dividends per share of the existing stock.
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Avoid financial distress.
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Maximize the current value per share of the existing stock.
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Maintain steady growth in both sales and net earnings.
question18
A project has an initial cost of $2,250. The cash inflows are $0, $500, $900, and $700 for Years 1 to 4, respectively. What is the payback period?
·
3.92 years
·
2.97 years
·
2.84 years
·
3.98 years
·
never
question19
Futures contracts contrast with forward contracts by:
·
Marking to the market on a weekly basis.
·
Providing an option for the buyer rather than an obligation.
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Allowing the parties to negotiate the contract size.
·
Requiring contract fulfillment by the two originating parties.
·
Allowing the seller to deliver any day during the delivery month.
question20
All else equal, the contribution margin must increase as:
·
The variable cost per unit declines.
·
The sales price minus the fixed cost per unit increases.
·
Sales price per unit declines.
·
The fixed cost per unit declines.
·
Both the sales price and variable cost per unit increase.
question21
Ratios that measure a firm’s ability to pay its bills over the short run without undue stress are known as:
·
Market value ratios.
·
Asset management ratios.
·
Liquidity measures.
·
Profitability ratios.
·
Long-term solvency measures.
question22
The costs of avoiding a bankruptcy filing by a financially distressed firm are classified as _____ costs.
·
Flotation
·
Capital structure
·
Financial solvency
·
Direct bankruptcy
·
Indirect bankruptcy
question23
An interest rate that is compounded monthly, but is expressed as if the rate were compounded annually, is called the _____ rate.
·
Daily interest
·
Compound interest
·
Effective annual
·
Periodic interest
·
Stated interest
question24
The higher the inventory turnover, the:
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Lesser the amount of inventory held by a firm.
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Longer it takes a firm to sell its inventory.
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Higher the inventory as a percentage of total assets.
·
Greater the amount of inventory held by a firm.
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Less time inventory items remain on the shelf.
question25
You plan to invest $6,500 for three years at 4 percent simple interest. What will your investment be worth at the end of the three years?
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$6,760.00
·
$6,941.11
·
$7,311.62
·
$7,250.00
·
$7,280.00
question26
Which one of these is a correct definition?
·
Tangible assets are fixed assets such as patents.
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Net working capital equals current assets plus current liabilities.
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Current assets are assets with short lives, such as inventory.
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Current liabilities are debts that must be repaid in 18 months or less.
·
Long-term debt is defined as a residual claim on a firm’s assets.
question27
One disadvantage of the corporate form of business ownership is the:
·
Double taxation of profits.
·
Difficulties encountered when changing ownership.
·
Firms ability to raise cash.
·
Limited liability protection provided for all owners.
·
Unlimited life of the firm.
question28
A firm has a total debt ratio of .47. This means the firm has 47 cents in debt for every:
·
$1 in current assets.
·
$1 in fixed assets.
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$.53 in total equity.
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$.53 in total assets.
·
$1 in total equity.
question29
Book value:
·
Generally tends to exceed market value when fixed assets are included.
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Is based on historical cost.
·
Is more of a financial than an accounting valuation.
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Is equivalent to market value for firms with fixed assets.
·
Is adjusted to market value whenever the market value exceeds the stated book value.
question30
An efficient capital market is one in which:
·
All investments earn the market rate of return.
·
Securities always offer a positive NPV.
·
Security prices reflect all available information.
·
Taxes are irrelevant.
·
Brokerage commissions are zero.
Spanish Escuchar
EscucharRead the statements. Then listen to a short biography of María Muñoz, and indicate whether each statement is cierto or falso.
- María Muñoz nació en Madrid.
- cierto
- falso
- Su madre le regaló un cuaderno.
- cierto
- falso
- María estudió computación.
- cierto
- falso
- María se casó después de graduarse.
- cierto
- falso
- María vive en California.
- cierto
- falso
EmparejarMatch the pictures and descriptions.
- 1 2 3 4 5 Ana cumple veintiún años.
- 1 2 3 4 5 Saúl abrió una botella de vino tinto.
- 1 2 3 4 5 Celebramos el Año Nuevo con champán.
- 1 2 3 4 5 La fiesta de cumpleaños de Marisa fue muy divertida.
- 1 2 3 4 5 Alberto y sus amigos celebran la Navidad.
¿Qué o cuál?Select the correct option for each question.
- ¿ Qué Cuál Cuáles es tu número de teléfono?
- ¿ Qué Cuál Cuáles pastel quieres comprar para la fiesta?
- ¿ Qué Cuál Cuáles son los colores de la bandera (flag) de México?
- ¿ Qué Cuál Cuáles vamos a hacer para el cumpleaños de la abuela?
- ¿ Qué Cuál Cuáles es el vino que prefieres?
VerbosFill in the blanks with the preterite form of the verbs.
- Yo (tener) que comprar los boletos de autobús.
- Sus amigas le (decir) que hace las mejores galletas de la ciudad.
- Carla y tú (traer) un regalo para María a la estación de autobuses.
- Nosotros no (saber) qué hacer cuando vimos a Virginia.
- Tú (estar) estudiando en España durante cuatro años.
- Los hermanos Salas (querer) comprar un carro nuevo.
- Tú (poder) terminar la tarea a tiempo.
- Lisa no (saber) lo que pasó en la fiesta.
- Marcia y tú (conocer) a Carolina en ese restaurante.
- Ella no (querer) preparar la ensalada para la cena.
- Yo le (dar) diez dólares a mi sobrinito.
PreposicionesFill in the blanks with the appropriate pronouns and prepositions.
- Lorena no quiere ir a la fiesta (with me).
- Ellos tienen que traer el flan (for him).
- Leonardo se va a sentar (with you, form.).
- Sandra se lleva muy bien (with you, fam.).
- Celebré el Año Nuevo (with her).
- Vamos a comprar unos postres (for you, fam.).
¡Viva la fiesta!Fill in the blanks with words from the box.aniversariobrindaronconcondujohizoparapudieronquisotrajo
- Liliana y Patricia prepararon una fiesta de (1) para sus amigos Victoria y David. Invitaron a todos los amigos de la pareja y, (2) ellas, lo mejor es que todos (3) asistir. Liliana(4) la reservación en un restaurante muy elegante del centro. Patricia (5) de la casa de Victoria y David al restaurante y llegó (6) ellos a la mesa donde estaban (were) todos esperando. Victoria (7) agradecer a sus amigos, pero no pudo porque empezó a llorar (to cry) de alegría. Todos (8) por la pareja y compartieron los postres y los dulces que el camarero(9) a la mesa.
LecturaRead the description, then answer the questions.El viernes Mirta hizo una fiesta para celebrar su cumpleaños. Ella cumplió 21 años. Luisa hizo un pastel y un flan. Sandra y Tomás trajeron el champán y los refrescos. Sebastián quiso venir, pero no pudo porque vive en otra ciudad. Así que, Sebastián le pidió a Luisa comprar unos dulces para Mirta y dárselos en la fiesta. Ella se puso muy contenta cuando supo que los dulces venían (came) de Sebastián. Fue una noche muy divertida. Estuvieron bailando y cantando hasta la medianoche.
- ¿Cuántos años cumplió Mirta?
- veintiuno
- veintidós
- veintitrés
- ¿Qué hizo Luisa?
- una ensalada
- unos dulces
- un pastel y un flan
- ¿Quién trajo el champán?
- Sandra y Tomás
- Mirta y Sebastián
- Sandra y Luisa
- ¿Fue Sebastián a la fiesta?
- sí
- no sé
- no
- ¿Cómo se puso Mirta cuando vio los dulces?
- alegre
- confundida
- preocupada
- Mirta y sus amigos bailaron hasta las…
- diez.
- once.
- doce.
Managed Care Organizations (MCOs) vs. Accountable Care Organizations (ACOs)
Discuss the differences and similarities between Managed Care Organizations (MCOs) vs. Accountable Care Organizations (ACOs). Given the current health care environment, provide a solid speculation to how MCOs and ACOs may transform to meet the needs of its consumers. Be sure to support your thoughts and analysis with scholarly sources.
*Will also need to respond to 3 classmate’s post, will send that after you turn in assignment.