MBA 702 Shi EXAM 1
Cado Industries has total debt of $6,800 and a debt-equity ratio of .36. What is the value
of the total assets? - answer$25,689 (Total equity = $6,800 / .36 = $18,889 Total assets
= $6,800 + 18,889 = $25,689)
A firm has sales of $38,900, net income of $2,400, total assets of $43,100, and total
equity of $24,700. Interest expense is $830. What is the common-size statement value
of the interest expense? - answer2.13%
You want to establish a trust fund that will provide $50,000 a year forever for your heirs.
If the fund can earn a guaranteed rate of return of 4.5 percent, how much must you
deposit in a lump sum to establish this trust? This will be the only deposit you make to
the fund. - answer$1,111,111.11
PV = $50,000 / .045 = $1,111,111.11
The ultimate control of a corporation lies in the hands of the corporate: -
answerStockholders
As seen on the income statement - answerdepreciation reduces both the pretax income
and the net income.
Peggy Grey's Cookies had net income of $8,110. The firm paid out 30 percent of the net
income to its shareholders as
dividends. During the year, the company repurchased $500 worth of common stock.
What is the cash flow to stockholders? - answer$2,933
Which one of these best fits the description of an agency cost? - answerthe payment
required for an outside audit of the firm
Noncash items refer to: - answerexpenses charged against revenues that do not directly
affect cash flow.
Olivia is willing to pay $185 a month for four years for a car payment. If the interest rate
is 4.9 percent, compounded monthly, and she has a cash down payment of $2,500,
what price car can she afford to purchase? - answer$10,549.07
Which one of these statements is correct? - answerEarnings per share can be negative
but dividends per share cannot.
Cado Industries has total debt of $6,800 and a debt-equity ratio of .36. What is the value
of the total assets? - answer$25,689 (Total equity = $6,800 / .36 = $18,889 Total assets
= $6,800 + 18,889 = $25,689)
A firm has sales of $38,900, net income of $2,400, total assets of $43,100, and total
equity of $24,700. Interest expense is $830. What is the common-size statement value
of the interest expense? - answer2.13%
You want to establish a trust fund that will provide $50,000 a year forever for your heirs.
If the fund can earn a guaranteed rate of return of 4.5 percent, how much must you
deposit in a lump sum to establish this trust? This will be the only deposit you make to
the fund. - answer$1,111,111.11
PV = $50,000 / .045 = $1,111,111.11
The ultimate control of a corporation lies in the hands of the corporate: -
answerStockholders
As seen on the income statement - answerdepreciation reduces both the pretax income
and the net income.
Peggy Grey's Cookies had net income of $8,110. The firm paid out 30 percent of the net
income to its shareholders as
dividends. During the year, the company repurchased $500 worth of common stock.
What is the cash flow to stockholders? - answer$2,933
Which one of these best fits the description of an agency cost? - answerthe payment
required for an outside audit of the firm
Noncash items refer to: - answerexpenses charged against revenues that do not directly
affect cash flow.
Olivia is willing to pay $185 a month for four years for a car payment. If the interest rate
is 4.9 percent, compounded monthly, and she has a cash down payment of $2,500,
what price car can she afford to purchase? - answer$10,549.07
Which one of these statements is correct? - answerEarnings per share can be negative
but dividends per share cannot.
