Ch 3 Quiz

# Ch 3 Quiz - 1 MC Qu 1 Which of the following activities...

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1. MC Qu. 1 Which of the following activities will incre. .. Which of the following activities will increase a firm's current ratio? Purchase inventory using cash. Buy equipment with a short-term bank loan. Accounts receivable are paid in cash. Accrued wages and taxes increase. None of these statements will increase a firm's current ratio. 2. MC Qu. 18 A firm reported sales of \$10 million. It had. .. A firm reported sales of \$10 million. It had a debt ratio of 40% and total debt amounted to \$3 million. What was the firm's capital intensity ratio? 1.25 times 2.02 times 0.40 times 0.75 times 3. MC Qu. 31 A firm reported a profit margin of 8.5%, tot. .. A firm reported a profit margin of 8.5%, total asset turnover of 0.85 times, debt-to-equity ratio of 0.90 times, net income of \$550,000, and dividends paid to common stockholders of \$100,000. The firm has no preferred stock outstanding. What is the firm's internal growth rate? 3.61% 6.29% 5.91% 11.04% ROA = PM * TA TO = .085 * 0.85 = 7.23%; RR = 450/550 = .8182; IGR = (0.0723 * .8182)/(1 - .0723 * .8182) = 6.29% 4.

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MC Qu. 32 A firm has a debt ratio of 45%, capital inte. .. A firm has a debt ratio of 45%, capital intensity ratio is 1.3 times, profit margin is 10%, and
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## This document was uploaded on 10/29/2011 for the course FIN 320 at Jackson State.

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Ch 3 Quiz - 1 MC Qu 1 Which of the following activities...

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