Finc600 Week 2 Practice Quiz

3. Geoff has a written agreement with Huck. To accomplish the objectives of this relationship, Geoff's authority can

9. What is the Cost of Debt, before and after taxes? Using the interest rate for the largest debt…cannot use the weighted interest rate for the debt since it includes capital lease obligations with no stated rate and could not find in the notes to the financials. 5.4% After tax cost is .054 x (1-.36) = 3.5%

I went shopping at the Mall for Christmas gifts over Thanksgiving furlough, and one store that I paid about $60 cash in the floor manger came over and verified the $50 bill using a pen. Furthermore, the store would not accept bills over $50. Additionally, another internal control I noticed was when my sister paid with her credit card at Forever 21, the bill was over $100 (girls and clothes); consequently, they asked her for her identification card.

(TCO A) Jean and Jim have liquid assets of $3,600 and other assets of $42,800. Their total liabilities equal $26,000. What is their net worth? (Show all work.)

(TCO 2) A statement that reports inflows and outflows of cash during the accounting period in the categories of operations, investing, and financing, is called a(an):

There are 8 main diversity dimensions that determine whether people are in the majority or minority population. Which one of the following is NOT a dimension?

There are many tasks I have undertaken or completed in the last year or two that have nothing to do with academics or education. Even though these tasks have not been related to my education, they have helped me prepare for the tasks I plan to undertake in 2014.

b. The fair value of a liability cannot differ from the amount appearing on the balance

1) Incremental cash flows are the cash flows that should be used in calculating the NPV of a project. The cash flows are changes in cash flows that occur as a direct consequence of accepting a project, not the cash flows that the company is already receiving.

Incremental cash flows is the difference between the cash flows a company will have if it implements the new project versus the cash flows the company will have if they choose not to embark

9. You want to purchase a business with the following cash flows. How much would you pay for this business today assuming you needed a 14% return to make this deal?

(Note: retained earnings information is irrelevant here) Part b. Total market value = debt + pref. equity + Common equity = 1,147,200 + 1,250,000 + 2,500,000 = $4,897,200

Joseph B. White, in his article “Why the Gasoline Engine Isn’t Going Anywhere,” begins with a short description of the modern electric car. He then proceeds to explain why that description is not accurate (White 260). This explanation continues through the rest of the article. For example, on page 261 the author explains how modern automakers have looked at alternatives for decades and still have not found an alternative as efficient as the gasoline engine. White proceeds to outline the costs involved with an electric car transition in America. On page 262, he narrates three examples of costs associated with this transition while including studies and statistics. One such study found that the United States could accommodate 10,000

1. Incremental cash flows are ultimately the relevant cash flows to be used in project analysis. It is the difference between the cash flows the firm will have if it implements the project, and the cash flows the firm will have if it rejects the project. Although they are a cash expense, interest expenses are not included in project cash flows. We discount a projects cash flows by using its weighted average cost of capital (WACC), which already includes the cost of debt. Therefore, we do not include interest expenses in cash flows because it would essentially be counting them twice.

Study Questions: Answer the following questions (based on the reading), save it and then submit it to the professor.