Exam3 FIN370 Winter 2009 - B - Key

# Exam3 FIN370 Winter 2009 - B - Key - Exam3 FIN370 Winter...

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Exam3 FIN370 Winter 2009 Key Version B 1. Outdoors sells specialty tents for mountain climbers. Its sales for last year included \$98,000 of tents and \$146,000 of climbing gear. For next year, management has decided to sell specialty sleeping bags also. As a result of this change, sales projections for next year are \$101,000 of tents, \$158,000 of climbing gear, and \$32,000 of sleeping bags. How much of next year's sales are derived from the side effects of adding the new product to its sales offerings? A. \$32,000 B. \$47,000 C. \$15,000 D. \$17,000 E. \$2,000 BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 009 #53 SECTION: 9.2 TOPIC: SIDE EFFECTS TYPE: PROBLEMS 2. Waterfront Properties wants to raise \$3.5 million by selling some coupon bonds at par. Comparable bonds in the market have an 8 percent annual coupon, 10 years to maturity, and are selling at 101.7 percent of par. What coupon rate should Waterfront Properties set on its bonds? A. 7.00 percent B. 8.00 percent C. 7.75 percent D. 7.25 percent E. 7.58 percent BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 2 LEVEL OF DIFFICULTY: INTERMEDIATE Ross - Chapter 006 #94 SECTION: 6.1 TOPIC: COUPON RATE TYPE: PROBLEMS

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3. The stock of Chocolate Galore is expected to produce the following returns given the various states of the economy. What is the expected return on this stock? A. 11.26 percent B. 7.33 percent C. 11.50 percent D. 11.33 percent E. 9.82 percent BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 011 #48 SECTION: 11.1 TOPIC: EXPECTED RETURN TYPE: PROBLEMS 4. Woven Goods is considering adding a new line of baskets to its product line-up. Which of the following are relevant cash flows for this project? I. increased revenue from existing goods if these baskets are added to the lineup II. revenue from the new line of baskets III. money spent to date investigating the availability of woven baskets IV. cost of expanding the showroom to make space for the new baskets A. II and III only B. I and IV only C. I, II, and IV only D. II, III, and IV only E. II and IV only BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 009 #18 SECTION: 9.1 TOPIC: RELEVANT CASH FLOWS TYPE: CONCEPTS
5. DL Industries just called a press conference and is now announcing that the firm is restructuring and will be closing two manufacturing facilities. This announcement: A. is a systematic event and thus has no effect on the price of the firm's stock. B. will have no effect on the firm's stock price if the announcement was expected. C.

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Exam3 FIN370 Winter 2009 - B - Key - Exam3 FIN370 Winter...

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