Exam Resit Corporate Finance 1
Januari 25th, 2009
1.
The secondary market is the market in which: A. the sale proceeds of a trade flow to the issuer of the security.
B.
one shareholder sells securities to another shareholder.
C.
publicly held firms issue new shares of stock.
D.
only bonds or other debt securities are sold.
E.
trades occur on exchanges other than the New York Stock Exchange.
2.
Which of the following questions are addressed by financial managers?
I. How long will it take to produce a product?
II. Should customers be given 30 or 45 days to pay for their credit purchases?
III. Should the firm borrow more money?
IV. Should the firm acquire new equipment? A.
I and IV only
B.
II and III
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The inventory is valued on the balance sheet at $289,000 and has a retail market value equal to 1.4 times its cost. Peter expects the store to collect 97 percent of the $48,041 in accounts receivable. The firm has $11,200 in cash and has total debt of $167,400. What is the market value of this firm? A.
$771,000
B.
$907,800
C.
$919,000
D.
$945,800
E.
$957,000
14.
The equity multiplier ratio is measured as: A. total equity divided by total assets.
B.
(total equity plus total debt) divided by total assets.
C.
(total assets minus total equity) divided by total assets.
D.
(total assets minus total equity) divided by total equity.
E.
total assets divided by total equity.
15.
The financial ratio measured as net income divided by total equity is known as the firm 's: A. profit margin.
B.
return on assets.
C.
return on equity.
D.
asset turnover.
E.
earnings before interest and taxes.
16.
Margo 's Dress Shoppe had the following values as of the end of last year and the end of this year. Which of the following are sources of cash for the year?
A. cash and accounts receivable
B.
cash and accounts payable
C.
accounts receivable and inventory
D.
cash, accounts payable, and inventory
E.
accounts payable, accounts receivable, and inventory
17.
Your firm currently has $1,800 in sales and is operating at 60 percent of the firm 's capacity. What is the full capacity level of
b. What is the total balance of Jessie Robinson 's revolving account? (0.5 points) N/A
Part D: Stock shortages = how much inventory was stolen/lost? = Ending retail book value of inventory – physical inventory at retail = $30,000 (calculated in Part C) - $10,000 (given in problem) = $20,000 (in stock shortages) ----------------------------------------------------------------------------------------------------------------------------- --------------------------Part E: Adjusted ending retail book value of inventory = adjusted the value of the retail book value of inventory to reflect the actual physical inventory on hand. This adjusts your books to match what you actually have at the store. = $10,000 (your physical inventory)
3) Assume that the Village of Hannah uses the purchases method of inventory accounting. At the end of the year the inventory levels have increased. What entry would be made to
Graceland still holds the inventory on December 31, 2008, and determines that its market value (replacement cost) is $82,000 at that time. Graceland writes the inventory down from $95,000 to its lower market value of $82,000 at the end of the year. Elvis owns 75% of Graceland. Based on this information, what amount of inventory should be eliminated in the consolidation workpaper for 2008?
Customer A B C D E F Sales Revenue $600 $4200 $300 $2500 $4900 $700
Financial ratios are great indicators to find a firm’s performance and financial situation. Most of the ratios are able to be calculated through the use of financial statements provided by the firm itself. They show the relationship between two or more financial variables that can be used to analyze trends and to compare the firm’s financials with other companies to further come up with market values or discount rates, etc.
2. (TCO 5) How much sales are required to earn a target income of $70,000, if total fixed costs are $100,000 and the contribution margin ratio is 40%?
1. The Widget Co. purchased new machinery three years ago for $4 million. The machinery can be sold to the Roman Co. today for $2 million. The Widget Co.'s current balance sheet shows net fixed assets of $2,500,000, current liabilities of $1,375,000, and net working capital of $725,000. If all the current assets were liquidated today, the company would receive $1.9 million in cash. The book value of the Widget Co.'s assets today is _____ and the market value of those assets is _____.
2. At the end of its first year of operations, Matlocke Company has total assets of $2,000,000 and total liabilities of $1,200,000. The owner originally invested $200,000 in the business, but has not made any further investments or taken any withdrawals. What is the first year 's net income for Matlocke Company?
Non-recourse financing has grown in popularity, especially in developing countries. It has done so more specifically in the basic infrastructure, natural resources and also in the energy sectors. Large-scale investments are mostly financed by project finance, due to the costs and complexities that face the standard sources of finance. The main feature of Project Finance is in the accurate estimation of cashflows and a precise
This coursework on corporate finance management is based on real-world, based on Sainsbury’s grocer. Sainsbury’s is one of the largest supermarkets in the UK, founded in 1869, by John James Sainsbury.
Aragorn Enterprises is evaluating an unusual investment project. What makes the project unusual is the stream of cash inflows and out flows shown in the following table:
1. An international bank loaned money to an emerging country a few years ago. Because of the nonpayment of interest due on this loan, the bank is now negotiating with the borrower to exchange the loan for Brady bonds. The Brady bonds that would be issued would be either par bonds or discount bonds with the same time to maturity.
Financial ratio indicating the relative proportion of equity and debt used to finance a company 's assets.
A company manufactures a single product in its factory utilizing 600% of its capacity. The selling price and cost details are given below: