Test Final Exam

Started 7/11/22 5:23 AM

Submitted 7/11/22 6:08 AM
Status Completed
Attempt Score 85 out of 100 points
Time Elapsed 45 minutes out of 2 hours
Results Displayed Submitted Answers, Feedback
 Question 1
5 out of 5 points
Which concept describes an investor's preference for less risky short-term bonds over risker long-term
bonds?

Selected Answer: Liquidity premium theory

 Question 2
0 out of 5 points
When do business owners and managers use financial statements?
Selected Answer: When setting the current market price of company common stock
 Question 3
5 out of 5 points
How can risk be managed in a financial environment?
Selected Answer: Diversify investment assets
 Question 4
5 out of 5 points
The acid test ratio is also known as which of the following?
Selected Answer: Quick ratio
 Question 5
5 out of 5 points
If you wanted to purchase previously issued shares of stock from another investor,
you would find the shares in the __________.
Selected Answer: secondary market
 Question 6
5 out of 5 points
Which of the following should be the primary goal pursued by the financial manager of a firm?

Selected Answer: Maximize the market value of the firm's stock

 Question 7
5 out of 5 points
You have $300,000 that you want to invest in a one-year Certificate of Deposit (CD)
with a 4% annual interest rate. What will be the value of that CD in a year?
Selected Answer: $312,000
 Question 8
5 out of 5 points
If investors are uncertain that they will be able to sell a corporate bond quickly, the
investors will demand a higher yield in the form of a(n) __________.
Selected Answer: liquidity risk premium
 Question 9
5 out of 5 points
As a short-term creditor concerned with a company's ability to meet its financial obligation to you, which
one of the following combinations of ratios would you most likely prefer?
Current Debt
ratio TIE ratio

Selected Answer: c.1.5 1.5 0.50

 Question 10
0 out of 5 points
What is the common challenge in the world of finance?
Selected Answer: It generally operates with a high degree of uncertainty.
 Question 11
5 out of 5 points
You are given the following information about a firm: The growth rate equals 8
percent, return on assets (ROA) is 10 percent, the debt ratio is 20 percent, and the
stock is selling at $36. What is the return on equity (ROE)?
Selected Answer: 12.5%
 Question 12
5 out of 5 points
Ollie Corporation has $800,000 of debt outstanding, and it pays an interest rate of 10 percent annually on
its bank loan. Ollie's annual sales are $3,200,000, its average tax rate is 40 percent, and its net profit
margin on sales is 6 percent. If the company does not maintain a TIE ratio of at least four times, its bank
will refuse to renew its loan, and bankruptcy will result. What is Ollie,s current TIE ratio?

Selected Answer: 5.0

 Question 13
5 out of 5 points
A person is planning to open a savings account with the intent to buy a house in five
years. They will invest an equal amount each month for five years. The account will
earn 6% per year and will have $300,000 at the end of the five-year term. What is the
amount of monthly investment? Round your answer to the nearest dollar.
Selected Answer: $4,300
 Question 14
5 out of 5 points
JT Battery Corporation is considering a capital project with an initial investment of
$50,000,000 (cash outflow). Forecasted cash inflows are $10,000,000 in year 1,
$20,000,000 in year 2, $20,000,000 in year 3, $10,000,000 in year 4, and $5,000,000
in year 5. The required rate of return is 15%. What is the NPV for this project?
 Selected Answer: ($4.83) million
 Question 15
5 out of 5 points
The price a dealer is willing to accept for selling security to an investor is called the
__________.
Selected Answer: ask price
 Question 16
5 out of 5 points
What would you pay today for a stock that is expected to make a $2 dividend in one
year if the expected dividend growth rate is 5% and you require a 12% return on your
investment?
Selected Answer: $28.57
 Question 17
0 out of 5 points
Based upon the following data, calculate the average collection period.
Cash $3,000 Accounts Receivable $1,000
Inventory $2,000 Total Sales $10,000
Cash Sales $4,000 Accounts Payable $2,300

Use 365 days for your daily credit sales calculation.

Selected Answer: 36.51

 Question 18
5 out of 5 points
What is time value of money (TVM)?
Selected Answer: Money today is worth more than the same amount in the future.
 Question 19
5 out of 5 points
What is a characteristic of simple interest?
Selected Interest is only earned on the initial principal balance no matter how
Answer: many periods have occurred.
 Question 20
5 out of 5 points
The stated interest payment, in dollars, made on a bond each period is called the
bond's __________.
Selected Answer: coupon.
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1. FINV 6301-20.01.00-2V23-S2, Corporate Finance

2. Final Exam
3. Review Test Submission: Final Exam

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Review Test Submission: Final Exam

User Nhi Ngoc Thao Cao

Course FINV 6301-20.01.00-2V23-S2, Corporate Finance
Test Final Exam
Started 7/11/22 5:20 AM
Submitted 7/11/22 5:49 AM
Status Completed
Attempt Score 95 out of 100 points
Time Elapsed 29 minutes out of 2 hours
Results Displayed Submitted Answers, Feedback
 Question 1
5 out of 5 points

How can risk be managed in a financial environment?

Selected Answer: Diversify investment assets
 Question 2
5 out of 5 points

What is time value of money (TVM)?

Selected Answer: Money today is worth more than the same amount in the future.
 Question 3
5 out of 5 points

Ollie Corporation has $800,000 of debt outstanding, and it pays an interest rate of 10 percent
annually on its bank loan. Ollie's annual sales are $3,200,000, its average tax rate is 40 percent,
and its net profit margin on sales is 6 percent. If the company does not maintain a TIE ratio of at
least four times, its bank will refuse to renew its loan, and bankruptcy will result. What is Ollie,s
current TIE ratio?

Selected Answer: 5.0

 Question 4
5 out of 5 points

If you wanted to purchase previously issued shares of stock from another investor, you would
find the shares in the __________.
Selected Answer: secondary market
 Question 5
5 out of 5 points
Which of the following should be the primary goal pursued by the financial manager of a firm?

Selected Answer: Maximize the market value of the firm's stock

 Question 6
5 out of 5 points

If the accounts receivable turnover ratio is decreasing, what will be happening to the average
collection period?
Selected Answer: The average collection period will be getting longer
 Question 7
5 out of 5 points

The cost of money is not related to the concept of __________.

Selected Answer: depreciation
 Question 8
5 out of 5 points

The price a dealer is willing to accept for selling security to an investor is called the
__________.
Selected Answer: ask price
 Question 9
5 out of 5 points

Calculate the debt ratio.

Selected Answer: 15.84%
 Question 10
5 out of 5 points

What is the term for a bond with a face value of $1,000 that sells for less than $1,000 in the
market?
Selected Answer: Discount bond
 Question 11
5 out of 5 points

If Boyd Corporation has sales of $2 million per year (all credit) and days sales outstanding of
35 days, what is its average amount of accounts receivable outstanding (assume a 360-day
year)?
Selected Answer: $194,444
 Question 12
5 out of 5 points

Yesterday, Tessie T's Corporation purchased (and received) raw materials on credit from its
supplier. All else equal, if Tessie T's current ratio was 2.0 before the purchase, what effect did this
transaction have on Tessie T's current ratio?

Selected Answer: Decreased

 Question 13
5 out of 5 points

A bond makes only one payment "the payment of the face value on the maturity date. The bond is
sold at a discount. What type of bond is this?

Selected Answer: Zero coupon bond

 Question 14
5 out of 5 points
Which term describes a bond that is unsecured by any type of collateral?
Selected Answer: Debenture
 Question 15
5 out of 5 points

The acid test ratio is also known as which of the following?

Selected Answer: Quick ratio
 Question 16
0 out of 5 points

What is the common challenge in the world of finance?

Selected Answer: It generally operates with a high degree of uncertainty.
 Question 17
5 out of 5 points

JT Battery Corporation is considering a capital project with an initial investment of

$50,000,000 (cash outflow). Forecasted cash inflows are $10,000,000 in year 1, $20,000,000
in year 2, $20,000,000 in year 3, $10,000,000 in year 4, and $5,000,000 in year 5. The
required rate of return is 15%. What is the NPV for this project?
Selected Answer: ($4.83) million
 Question 18
5 out of 5 points

Calculate the return on equity (ROE).

 Selected Answer: 27.06%
 Question 19
5 out of 5 points

Which feature is generally not associated with preferred stock?

Selected Answer: Voting rights
 Question 20
5 out of 5 points

As a short-term creditor concerned with a company's ability to meet its financial obligation to
you, which one of the following combinations of ratios would you most likely prefer?
Current Debt
ratio TIE ratio

Selected Answer: c.1.5 1.5 0.50

Monday, July 11, 2022 5:49:28 AM CDT
OK
Review Test Submission: Final Exam
User Lien Thi Bich Le
Course FINV 6301-20.01.00-2V23-S2, Corporate Finance
Test Final Exam
Started 7/11/22 5:21 AM
Submitted 7/11/22 6:40 AM
Status Completed
Attempt Score 90 out of 100 points
Time Elapsed 1 hour, 19 minutes out of 2 hours
Results Displayed Submitted Answers, Feedback
 Question 1
5 out of 5 points

You are given the following information about a firm: The growth rate equals 8
percent, return on assets (ROA) is 10 percent, the debt ratio is 20 percent, and the
stock is selling at $36. What is the return on equity (ROE)?
Selected Answer: 12.5%
 Question 2
5 out of 5 points

Which of the following is not a limitation of ratio analysis?

Selected Answer: Best used to compare companies from different industries
 Question 3
5 out of 5 points

If Boyd Corporation has sales of $2 million per year (all credit) and days sales
outstanding of 35 days, what is its average amount of accounts receivable
outstanding (assume a 360-day year)?
Selected Answer: $194,444
 Question 4
5 out of 5 points

A person currently 20 years of age has $4,800 already saved. If $100 monthly
investment payments are made for 60 years, earning 6% interest, how much will have
been saved at age 80?
Selected Answer: $879,531
 Question 5
5 out of 5 points

If the accounts receivable turnover ratio is decreasing, what will be happening to the
average collection period?
Selected Answer: The average collection period will be getting longer
 Question 6
5 out of 5 points

Calculate the return on equity (ROE).

Selected Answer: 27.06%

 Question 7
5 out of 5 points

How can risk be managed in a financial environment?

Selected Answer: Diversify investment assets
 Question 8
 0 out of 5 points

Suppose Lilly V, Inc. has just paid a dividend. The next dividend, to be paid in a year,
is forecasted to be $4. If the growth rate of dividends is 7% and the discount rate is
11%, at what price will the stock sell?
Selected Answer: Less than $100
 Question 9
5 out of 5 points

Which of the following should be the primary goal pursued by the financial manager of a firm?

Selected Answer: Maximize the market value of the firm's stock

 Question 10
5 out of 5 points

What is a characteristic of simple interest?

Selected Interest is only earned on the initial principal balance no matter how
Answer: many periods have occurred.
 Question 11
5 out of 5 points

Which investment involves low risk and yields a low return?

Putting money in a bank savings account
Selected Answer:
 Question 12
5 out of 5 points

If investors are uncertain that they will be able to sell a corporate bond quickly, the
investors will demand a higher yield in the form of a(n) __________.
liquidity risk premium
Selected Answer:
 Question 13
5 out of 5 points

Based upon the following data, calculate the average collection period.
Cash $3,000 Accounts Receivable $1,000
Inventory $2,000 Total Sales $10,000
Cash Sales $4,000 Accounts Payable $2,300

Use 365 days for your daily credit sales calculation.

Selected Answer: 60.83

 Question 14
5 out of 5 points

Selena Enterprises has a forecast with current assets of $120 million, current
liabilities of $80 million, fixed assets of $450 million, long-term debt of $200 million,
and equity of $140 million. What is the SGR?
 $150 million
Selected Answer:
 Question 15
5 out of 5 points

Yesterday, Tessie T's Corporation purchased (and received) raw materials on credit from its supplier. All
else equal, if Tessie T's current ratio was 2.0 before the purchase, what effect did this transaction have on
Tessie T's current ratio?

Selected Answer: Decreased

 Question 16
5 out of 5 points

You have $300,000 that you want to invest in a one-year Certificate of Deposit (CD)
with a 4% annual interest rate. What will be the value of that CD in a year?
$312,000
Selected Answer:
 Question 17
5 out of 5 points

JT Battery Corporation is considering a capital project with an initial investment of

$50,000,000 (cash outflow). Forecasted cash inflows are $10,000,000 in year 1,
$20,000,000 in year 2, $20,000,000 in year 3, $10,000,000 in year 4, and $5,000,000
in year 5. The required rate of return is 15%. What is the NPV for this project?
($4.83) million
Selected Answer:
 Question 18
5 out of 5 points

Which term describes a bond that is unsecured by any type of collateral?

Debenture
Selected Answer:
 Question 19
5 out of 5 points

A bond makes only one payment "the payment of the face value on the maturity date. The bond is sold at a
discount. What type of bond is this?

Selected Answer: Zero coupon bond

 Question 20
0 out of 5 points

What do retained earnings on a balance sheet represent?

Selected Answer: The total of firm earnings that have been reinvested in the firm
User Cuong Minh Pham
Course FINV 6301-20.01.00-2V23-S2, Corporate Finance
Test Final Exam
Started 7/11/22 5:21 AM
Submitted 7/11/22 6:26 AM
Status Completed
Attempt Score 95 out of 100 points
Time Elapsed 1 hour, 5 minutes out of 2 hours
Results Displayed Submitted Answers, Feedback
 Question 1
5 out of 5 points
The time to maturity of bond A is 20 years, whereas time to maturity of bond B is 5
years. What happens to the market price of these bonds if market interest rates
rise?
Selected The price of bond A decreases faster than the price of bond B
Answer: decreases.
 Question 2
5 out of 5 points
Yesterday, Tessie T's Corporation purchased (and received) raw materials on credit from its supplier. All
else equal, if Tessie T's current ratio was 2.0 before the purchase, what effect did this transaction have
on Tessie T's current ratio?

Selected Answer: Decreased

 Question 3
5 out of 5 points
A company has sales of $132 million, net income of $24 million, a total asset turnover of 0.84, and a
leverage multiplier of 1.6. What is the company's return of equity, using the DuPont formula?

Selected Answer: 24.43%

 Question 4
5 out of 5 points
As a short-term creditor concerned with a company's ability to meet its financial obligation to you, which
one of the following combinations of ratios would you most likely prefer?
Current Debt
ratio TIE ratio

Selected Answer: c.1.5 1.5 0.50

 Question 5
5 out of 5 points
If you divide a bond's annual coupon payment by its current yield, you get the
__________.
 Selected Answer: bond price
 Question 6
5 out of 5 points
JT Battery Corporation is considering a capital project with an initial investment of
$50,000,000 (cash outflow). Forecasted cash inflows are $10,000,000 in year 1,
$20,000,000 in year 2, $20,000,000 in year 3, $10,000,000 in year 4, and
$5,000,000 in year 5. The required rate of return is 15%. What is the NPV for this
project?
Selected Answer: ($4.83) million
 Question 7
5 out of 5 points
The Bulldog Company paid $1.50 in dividends this year. If dividends are expected
to grow at a rate of 3 percent per year, what is the expected dividend per share for
Bulldog 5 years from today?
Selected Answer: $1.7389
 Question 8
0 out of 5 points
When do business owners and managers use financial statements?
Selected Answer: When deciding to use retained earnings as a cash account
 Question 9
5 out of 5 points
A person currently 20 years of age has $4,800 already saved. If $100 monthly
investment payments are made for 60 years, earning 6% interest, how much will
have been saved at age 80?
Selected Answer: $879,531
 Question 10
5 out of 5 points
What is a characteristic of simple interest?
Selected Interest is only earned on the initial principal balance no matter how
Answer: many periods have occurred.
 Question 11
5 out of 5 points
How can risk be managed in a financial environment?
Selected Answer: Diversify investment assets
 Question 12
5 out of 5 points
 If Boyd Corporation has sales of $2 million per year (all credit) and days sales
outstanding of 35 days, what is its average amount of accounts receivable
outstanding (assume a 360-day year)?
Selected Answer: $194,444
 Question 13
5 out of 5 points
Which term describes a bond that is unsecured by any type of collateral?
Selected Answer: Debenture
 Question 14
5 out of 5 points
Ollie Corporation has $800,000 of debt outstanding, and it pays an interest rate of 10 percent annually
on its bank loan. Ollie's annual sales are $3,200,000, its average tax rate is 40 percent, and its net profit
margin on sales is 6 percent. If the company does not maintain a TIE ratio of at least four times, its bank
will refuse to renew its loan, and bankruptcy will result. What is Ollie,s current TIE ratio?

Selected Answer: 5.0

 Question 15
5 out of 5 points
Calculate the debt ratio.
 Selected Answer: 15.84%

 Question 16
5 out of 5 points
If the accounts receivable turnover ratio is decreasing, what will be happening to the
average collection period?
Selected Answer: The average collection period will be getting longer
 Question 17
5 out of 5 points
Which of the following should be the primary goal pursued by the financial manager of a firm?

Selected Answer: Maximize the market value of the firm's stock

 Question 18
5 out of 5 points
What is time value of money (TVM)?
Selected Answer: Money today is worth more than the same amount in the future.
 Question 19
5 out of 5 points
Calculate the return on equity (ROE).
 Selected Answer: 27.06%

 Question 20
5 out of 5 points
What would you pay today for a stock that is expected to make a $2 dividend in one
year if the expected dividend growth rate is 5% and you require a 12% return on
your investment?
Selected Answer: $28.57
Review Test Submission: Final Exam
User Duc Tri Tran
Course FINV 6301-20.01.00-2V23-S2, Corporate Finance
Test Final Exam
Started 7/11/22 5:22 AM
Submitted 7/11/22 6:38 AM
Status Completed
Attempt Score 90 out of 100 points
Time Elapsed 1 hour, 16 minutes out of 2 hours
Results Displayed Submitted Answers, Feedback
 Question 1
5 out of 5 points

What is the market value of a bond that will pay a total of 50 semiannual coupons of
$80 each over the remainder of its life? Assume the bond has a $1,000 face value
and a 12% yield to maturity.
Selected Answer: $1,315.24
 Question 2
5 out of 5 points

The price a dealer is willing to accept for selling security to an investor is called the
__________.
Selected Answer: ask price
 Question 3
5 out of 5 points

The Bulldog Company paid $1.50 in dividends this year. If dividends are expected to
grow at a rate of 3 percent per year, what is the expected dividend per share for
Bulldog 5 years from today?
Selected Answer: $1.7389
 Question 4
5 out of 5 points

The cost of money is not related to the concept of __________.

Selected Answer: depreciation
 Question 5
5 out of 5 points

What is time value of money (TVM)?

Selected Answer: Money today is worth more than the same amount in the future.
 Question 6
5 out of 5 points
Tikki View Corp. has a net income of $2.66 million, pays dividends of $1.0 million,
has sales of $66.0 million, total assets of $165.9 million, and total equity of $95
million. What is the SGR?
Selected Answer: 1.75%
 Question 7
5 out of 5 points

If the accounts receivable turnover ratio is decreasing, what will be happening to the
average collection period?
Selected Answer: The average collection period will be getting longer
 Question 8
5 out of 5 points

What is the term for a bond with a face value of $1,000 that sells for less than $1,000
in the market?
Selected Answer: Discount bond
 Question 9
0 out of 5 points

Suppose Lilly V, Inc. has just paid a dividend. The next dividend, to be paid in a year,
is forecasted to be $4. If the growth rate of dividends is 7% and the discount rate is
11%, at what price will the stock sell?
Selected Answer: Less than $100
 Question 10
5 out of 5 points

Town Davis Limousine is considering a capital investment with an initial investment of

$100,000,000 and wants to know how long it would take to make their money back
from the investment. Calculate the payback period using the following cash flow data:
$15,000,000 in year 1, $20,000,000 in year 2, $40,000,000 in year 3, $30,000,000 in
year 4, and $20,000,000 in year 5.
Selected Answer: 3.83 Years
 Question 11
5 out of 5 points

Which of the following is not a limitation of ratio analysis?

Selected Answer: Best used to compare companies from different industries
 Question 12
5 out of 5 points

A bond makes only one payment "the payment of the face value on the maturity date. The bond is sold at a
discount. What type of bond is this?

Selected Answer: Zero coupon bond

 Question 13
5 out of 5 points

JT Battery Corporation is considering a capital project with an initial investment of

$50,000,000 (cash outflow). Forecasted cash inflows are $10,000,000 in year 1,
$20,000,000 in year 2, $20,000,000 in year 3, $10,000,000 in year 4, and $5,000,000
in year 5. The required rate of return is 15%. What is the NPV for this project?
Selected Answer: ($4.83) million
 Question 14
5 out of 5 points

The time to maturity of bond A is 20 years, whereas time to maturity of bond B is 5

years. What happens to the market price of these bonds if market interest rates rise?
Selected The price of bond A decreases faster than the price of bond B
Answer: decreases.
 Question 15
5 out of 5 points

You have $300,000 that you want to invest in a one-year Certificate of Deposit (CD)
with a 4% annual interest rate. What will be the value of that CD in a year?
Selected Answer: $312,000
 Question 16
5 out of 5 points

If you divide a bond's annual coupon payment by its current yield, you get the
__________.
Selected Answer: bond price
 Question 17
5 out of 5 points

The acid test ratio is also known as which of the following?

Selected Answer: Quick ratio
 Question 18
5 out of 5 points

D&G Enterprises issues bonds with a $1,000 face value that make coupon payments
of $30 every 3 months. What is the coupon rate?
Selected Answer: 12.00%
 Question 19
0 out of 5 points

What do retained earnings on a balance sheet represent?

Selected Answer: The total of firm earnings that have been reinvested in the firm
 Question 20
 5 out of 5 points

Calculate the debt ratio.

Selected Answer: 15.84%