2504b_final0 - Final EXAMINATION August 2009 DURATION 3...

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Final EXAMINATION August 2009 DURATION: 3 HOURS No. of Students: 27 Course: BUSI 2504 B - Essentials of Business Finance Instructor: Mitch Murphy Student Name: Student Number: Grade: / 30 + / 70 = / 100 AUTHORIZED MEMORANDA BAII Plus calculator. Students MUST count the number of pages in this examination question paper before beginning to write, and report any discrepancy to a proctor. This question paper has 14 pages (including this cover). This examination question paper MAY NOT be taken from the examination room. In addition to this question paper, students require: an examination booklet NO a Scantron sheet NO This examination question paper MAY NOT be released to the library.
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Page 2/14 Final Exam - August 22, 2009, 14:00-17:00 BUSI 2504B FORMULAS FV = PV (1 + r ) t ; PV = FV (1 + r ) t ; EAR = 1 + APR m m – 1; PV = PMT 1 – 1 (1+ r ) t r ! + FV (1 + r ) t ; P 0 = D 1 1 + r + D 2 (1 + r ) 2 + . . . ; P 0 = D r ; P 0 = D 0 (1 + g ) r g = D 1 r g ; R = D 1 P 0 + g ; P 0 = D 1 1 + r + D 2 (1 + r ) 2 + · · · + D t (1 + r ) t + P t (1 + r ) t ; P t = D t +1 r g ; DR = D + ( P end P start ); PR = DR P start = D P start + P end P start P start ; ¯ r = r 1 + · · · + r n n ; ˜ r = [(1 + r 1 ) · · · (1 + r n )] 1 /n – 1; Var( r ) = 1 n – 1 n i = 1 ( r i – ¯ r ) 2 ; StdDev( r ) = p Var( r ); WACC = E V R E + P V R P + D V R D (1 – T C ); E + P + D = V ;
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BUSI 2504B Final Exam - August 22, 2009, 14:00-17:00 Page 3/14 PART A: MULTIPLE CHOICE (10 QUESTIONS - 30 MARKS) [ 3] Q1. The process of planning and managing a firm’s long-term investments is called: (a) Working capital management. (b) Financial depreciation. (c) Agency cost analysis. (d) Capital budgeting. (e) Capital structure. [ 3] Q2. Non-cash items are: (a) The credit sales of a firm. (b) The accounts payable of a firm. (c) Expenses incurred for the purchase of intangible fixed assets. (d) Expenses charged against revenues that do not directly affect cash flow. (e) All accounts on the balance sheet other than cash on hand. [ 3] Q3. Which one of the following is found in the financing activity section of a statement of cash flows? (a) fixed asset acquisition. (b) depreciation. (c) increase in accounts receivable. (d) dividends paid. (e) net income.
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Page 4/14 Final Exam - August 22, 2009, 14:00-17:00 BUSI 2504B [ 3] Q4. The concept that a dollar received today is worth more than a dollar received tomorrow is referred to as the: (a) Compound interest.
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