Unit 3 Intellipath

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Colorado Technical University *

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615

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Finance

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Feb 20, 2024

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docx

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In the decision-making process, an investor will do which of the following? Only look at one investment option Ignore consideration to level of risk Assess each of the investments to determine which is the most sensible choice Not consider personal risk Apex Printing, Inc. is a private, domestic United States printer of periodicals, newspaper inserts, and advertising materials that accompany distributions of Sunday and weekday circulations of large metropolitan newspapers. As the new vice president (VP) of finance, you report to the chief financial officer (CFO). In this capacity, your responsibilities include the assessment of new business investment opportunities to grow Apex's expansion endeavors in a challenging market. Your investment strategy includes consideration of an initial public offering (IPO). The CFO has asked you to present the IPO as it applies to benefits for Apex. Which of the following benefits could be presented to increase support on the projected investment? Provides the opportunity for an organization to enter into mergers and acquisitions Does not allow for selling publicly-traded stock Limits growth No options for stockholders wanting to liquidate their interest in an organization Apex Printing, Inc. is a private, domestic United States printer of periodicals, newspaper inserts, and advertising materials that accompany distributions of Sunday and weekday circulations of large metropolitan newspapers. As the new vice president (VP) of finance, you report to the chief financial officer (CFO). In this capacity, your responsibilities include the assessment of new business investment opportunities to grow Apex's expansion endeavors in a challenging market. The net present value (NPV) of the current project has been calculated at - $12,000. Which of the following statements is true about the project with the calculated NPV? No exceptions exist. Alternatives should not be considered. The net present value does not justify the initial investment for the project. Profits are projected on the investment. Which of the following is an advantage of internal rate of return (IRR)? It is a calculated investment return as on a stand-alone basis. It is easy to communicate. It does not relate to the calculated results of net present value (NPV).

It guarantees the accuracy of cash inflows. It determines if a return will be earned on an investment. In a decision to buy or lease, which of the following factors will have an influence on the final decision? Personal preference Size Improved efficiencies Opinion Growth Which of the following is part of the strategy of a venture capital company? Streamline operations. Decrease the earnings of the company. Purchase new equipment. Separate the company's operations. Apex Printing, Inc. is a private, domestic United States printer of periodicals, newspaper inserts, and advertising materials that accompany distributions of Sunday and weekday circulations of large metropolitan newspapers. As the new vice president (VP) of finance, you report to the chief financial officer (CFO). In this capacity, your responsibilities include the assessment of new business investment opportunities to grow Apex's expansion endeavors in a challenging market. You are interested in evaluating any special situations that are present in Apex. Which of the following special situations will you evaluate to determine if any of them apply to the current position of Apex? Valuation in mergers and acquisitions Valuation of efficiencies Valuation of financing Valuation of operations Apex Printing, Inc. is a private, domestic United States printer of periodicals, newspaper inserts, and advertising materials that accompany distributions of Sunday and weekday circulations of large metropolitan newspapers. As the new vice president (VP) of finance, you report to the chief financial officer (CFO). In this capacity, your responsibilities include the assessment of new business investment opportunities to grow Apex's expansion endeavors in a challenging market. As part of the evaluation for Apex, you decide to determine its efficient market hypothesis (EMH). You determine that Apex

has a semistrong EMH. Which of the following factors provide information to determine this? It is limited. It does not look at the current stock value. It includes historical stock price information. It does not look at all available information. Apex Printing, Inc. is a private, domestic United States printer of periodicals, newspaper inserts, and advertising materials that accompany distributions of Sunday and weekday circulations of large metropolitan newspapers. As the new vice president (VP) of finance, you report to the chief financial officer (CFO). In this capacity, your responsibilities include the assessment of new business investment opportunities to grow Apex's expansion endeavors in a challenging market. To increase value for the organization, you propose a value-based management strategy. Which of the following areas of emphasis is part of the value-based management strategy presented? Profits only Earnings over discounted cash flows Accounting profits over economic profits Discounted cash flows over earnings Which of the following is true about competitive advantage? It is based on results of an organization and not value. It is not important to the success of an organization. It is the opportunity to compete more efficiently with competitors. It does not consider competition in the strategy of the organization. What is the first step of a financial planning process? Prepare pro forma financial statements. The calculation for net new equity includes __________. assets interest not paid existing loans net new equity Apex Printing, Inc. is a private, domestic United States printer of periodicals, newspaper inserts, and advertising materials that accompany distributions of Sunday and weekday circulations of large metropolitan newspapers. As the new vice president (VP) of finance, you report to the chief financial officer (CFO). In this capacity, your responsibilities include the assessment of

new business investment opportunities to grow Apex's expansion endeavors in a challenging market. The calculated operating cash flow for Apex is equal to $740,000. Which of the following is true about the calculated cash flow from operations for Apex? Financing and investing cash flow should also be considered. Profits are not being earned by Apex. With positive operating cash flows, other cash flow does not matter. Apex could be more profitable. Apex Printing, Inc. is a private, domestic United States printer of periodicals, newspaper inserts, and advertising materials that accompany distributions of Sunday and weekday circulations of large metropolitan newspapers. As the new vice president (VP) of finance, you report to the chief financial officer (CFO). In this capacity, your responsibilities include the assessment of new business investment opportunities to grow Apex's expansion endeavors in a challenging market. Use the following formula to calculate the free cash flow from assets for Apex: Operating cash flow - CAPEX - Change in OWC Operation cash flow: $600,000 Capital expenditure (CAPEX): $200,000 Change in operating working capital (OWC): $20,000. $380,000 $820,000 $420,000 $780,000 A lower WACC will lead to: Higher borrowing costs A decreased spread on profit from projects A lower hurdle rate for projects A rise in the level of project risk A reduction in the level of project risk Calculating the weighted average cost of capital includes __________. only the cost of equity only the cost of debt the amount of money investors will fund

each category of capital proportions of capital types Mary Francis has just returned to her office after attending preliminary discussions with investment bankers. Her last meeting regarding the intended capital structure of Apex went well, and she calls you into her office to discuss the next steps. “We will need to determine the required return for our intended project so that we have decision criteria defined for the project,” she says. Options for decision criteria would include which of the following? The marketing budget The average of the firms' cost to access capital Accounts receivable Current assets Agency cost of equity arises when there are differences between shareholders and management. Which of the following is not a direct expense of a stock issue? Administrative expenses The risk of the stock price falling because of dilution of stock Selling the stock Developing the prospectus When a company sells common stock shares, it gives up part of its ownership and voting rights in return. The calculation of the WACC includes which of the following? Owners' equity Loan balances remaining after bankruptcy Inventory turnover Market value of equity Market value of preferred stock If all other factors in the WACC calculation stay constant, increasing the amount of current debt will __________. increase the WACC decrease the WACC decrease the interest expenses increase expenses, leading to an increased WACC cause the weighted cost of capital to be reduced increase expenses, leading to a decreased WACC

An increase in risk will __________. force investors to buy stock cause Beta to decrease cause the WACC to increase reduce the weighted average cost of capital decrease a firm's ability to access capital be reflected in a higher Beta A lower WACC will lead to: Higher borrowing costs A higher hurdle rate for projects A rise in the level of project risk A lower hurdle rate for projects A letter of credit would be considered __________. a short-term loan an unsecured loan with low interest a long-term source of funding an approval from a bank that money can be borrowed Which of the following is most long-term financing used for? Accounts receivable Insurance costs Research and development (R&D) projects Payroll If Apex chooses to preserve a fixed debt-equity ratio, it can raise the additional funds by __________. issuing preferred stock while calling in bonds issuing stock, where dividends become the corresponding item issuing stock, where no corresponding item is needed issuing debt, where dividends become the corresponding item Apex Printing, Inc. is a private, domestic United States printer of periodicals, newspaper inserts, and advertising materials that accompany distributions of Sunday and weekday circulations of large metropolitan newspapers. The Apex Printing Inc. board of directors has recently completed its multiyear strategic plan. Included in the plan is an intent to diversify Apex's current product line to include food packaging. Additional investment is required for

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