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FINA 3332 - EXAM 4 TopHat Questions
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- Weekly In-Class Quizzes over Chapters 8, 9, and 11.
Terms in this set (15)
The chance of receiving an actual return that differs from the one that is expected is called ______________.
Risk
Risk is indicated by variability, whether the variability is considered positive or negative. Both the positive and negative outcomes must be evaluated when considering risk.
TRUE
The standard deviation is calculated as the weighted average of all the deviations from the expected value, and it indicates how far above or below the expected value the actual value is expected to be.
TRUE
The greater the variability of the possible returns on an investment, ______________.
the riskier the investment.
What is capital budgeting?
The financial analysis that a corporation conducts to determine if they should pursue a potential investment.
Which of the following is an example of a capital investment project?
All of the above are examples of capital investment projects.
One advantage of the payback period method is that it provides a rough measure of a project's liquidity and risk.
TRUE
If the cost of an investment is $12,000 and the expected cash flow from the investment is $4,000, then the payback period is 4 years.
FALSE
If a firm has a 25% tax rate and it's cost of debt is 8.25, what is the net cost of this debt to a firm?
6.19%
The ______________ on a bond is the cost to the firm for using bondholders' funds.
yield to maturity (YTM)
The before-tax cost of debt is the same as the:
yield to maturity (YTM) associated with the firm's bonds.
Flotation costs are what a firm pays to investment bankers for their assistance in the issuance of new equity securities.
TRUE
A firm's weighted average cost of capital (WACC) is:
determined by participants in the financial markets.
Under normal circumstances, the weighted average cost of capital (WACC) is used as the firm's required rate of return because:
as long as the firm's investments earn returns greater than its WACC, the value of the firm will be increased.
Beige Inc. is evaluating three independent capital budgeting projects whose internal rates of return (IRRs) are greater than the firm's marginal cost of capital (WACC). Beige should choose:
all of the projects whose internal rates of return (IRRs) are greater than the firm's weighted average cost of capital (WACC).
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Verified questions
finance
The following data relate to notes receivable and interest for Owens Co., a financial services company. (All notes are dated as of the day they are received.) Mar. 8. Received a $33,000, 5%, 60-day note on account. 31. Received an$80,000, 7%, 90-day note on account. May 7. Received $33,275 on note of March 8. 16. Received a$72,000, 7%, 90-day note on account. June 11. Received a $36,000, 6%, 45-day note on account. 29. Received$81,400 on note of March 31. July 26. Received $36,270 on note of June 11. Aug. 4. Received a$48,000, 9%, 120-day note on account. 14. Received $73,260 on note of May 16. Dec. 2. Received$49,440 on note of August 4. Instructions Journalize the entries to record the transactions.
question
Which one of the following is the annuity present value formula? <br> <br> <br> A. $C ×\dfrac{1 - \frac{1}{(1 + r )^t}}{ r}$<br><br> B. $C × 1 - \bigg[\dfrac{1}{(1 + r )^t }\bigg]- r$<br> <br> C. $C ×\dfrac{1 -\frac{r}{(1+ r )^t }}{r}$<br> <br> D. $C × 1 - \bigg[\dfrac{1}{(1 × r )^t}\bigg] × r$<br> <br> E. $C ×{1 - \bigg[ \dfrac{r }{(1 × r )^t}\bigg]} × r$<br> <br>
algebra
**Find the slope and $y$-intercept of each line.** $$ x=-\frac{3}{4} y+\frac{3}{2} $$
finance
The current assets and current liabilities for Apple Inc. and Dell, Inc., are shown as follows at the end of a recent fiscal period: $$ \begin{array}{lrr} & \text { Apple Inc. } & \text { Dell, Inc. } \\ & \text { (in millions) } & \text { (in millions) } \\ \hline \text { Current assets: } & & \\ \quad\text { Cash and cash equivalents } & \$ 11,261 & \$ 13,913 \\ \quad\text { Short-term investment } & 14,359 & 452 \\ \quad\text { Accounts receivable } & 11,560 & 10,136 \\ \quad\text { Inventories } & 1,051 & 1,301 \\ \quad\text { Other current assets* } & 3,447 & 3,219 \\ \quad\quad \text { Total current assets } & \underline{\underline{\$ 41,678}} & \underline{\underline{\$ 29,021}} \\ \text { Current liabilities: }\\ \quad\text { Accounts payable } & \$ 17,738 & \$ 15,474 \\ \quad\text { Accrued and other current liabilities } & 2,984 & 4,009 \\ \quad\quad\text { Total current liabilities } & \$ 20,722 & \$ 19,483 \\\hline\hline \end{array} $$ *These represent prepaid expense and other nonquick current assets. b. Interpret the quick ratio difference between the two companies.
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