Exam3 FIN370 A Key (2)

Exam3 FIN370 A Key (2) - Exam3 FIN370 Winter 2009 Key...

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Exam3 FIN370 Winter 2009 Key Version A 1. A sunk cost is: a. the value of an asset currently owned by a firm. b. a form of erosion. C. a cost that has already been incurred and cannot be recouped. d. a cost for which there is no alternative option. e. another name for a fixed cost. BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 009 #3 SECTION: 9.2 TOPIC: SUNK COST TYPE: DEFINITIONS 2. One year ago, you purchased 200 shares of stock for $29 a share. The stock pays $.60 a share in dividends each year. Today, you sold your shares for $31.60 a share. What is your total dollar return on this investment? a. $670 b. $610 c. $520 d. $480 E. $640 BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 1 LEVEL OF DIFFICULTY: BASIC Ross - Chapter 010 #44 SECTION: 10.1 TOPIC: DOLLAR RETURN TYPE: PROBLEMS
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3. Which of the following will increase the net income of a profitable firm? I. decreasing the depreciation II. increasing the variable cost per unit III. decreasing fixed costs IV. increasing revenue A. I, III, and IV only b. III and IV only c. I, II, and III only d. II, III, and IV only e. I and IV only BLOOMS TAXONOMY QUESTION TYPE: COMPREHENSION LEARNING OBJECTIVE NUMBER: 2 LEVEL OF DIFFICULTY: INTERMEDIATE Ross - Chapter 002 #31 SECTION: 2.2 TOPIC: NET INCOME TYPE: CONCEPTS 4. You are considering the following two mutually exclusive projects. The crossover point is _____ and Project _____ should be accepted if the discount rate for the project exceeds the crossover rate. a. 9.93 percent; A B. 11.02 percent; A c. 11.02 percent; B d. 9.54 percent; B e. 9.93 percent; B BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 4 LEVEL OF DIFFICULTY: INTERMEDIATE Ross - Chapter 008 #91 SECTION: 8.4 TOPIC: NPV PROFILE TYPE: PROBLEMS
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5. All of the following are characteristics of common stock except the: a. right to share proportionally in any residual value in a bankruptcy proceeding. b. ability to vote for corporate directors. c. ability to vote on key issues such as a merger. D. priority over other equity in a bankruptcy proceeding. e. right to share proportionally in dividends paid to common shareholders. BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE LEVEL OF DIFFICULTY: BASIC Ross - Chapter 007 #37 SECTION: 7.2 TOPIC: COMMON STOCK CHARACTERISTICS TYPE: CONCEPTS 6. Which one of the following statements is correct? a. The returns on stocks are considered to be normally distributed but the returns on bonds are not. b. The distribution of U.S. Treasury bills over the period of 1926-2006 appears as a single vertical line. C. The returns on stocks are treated as a normal distribution that can be defined by the mean and standard deviation. d. The annual rates of inflation for the period 1926-2006 have a narrower bell curve than do the returns on U.S.
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This note was uploaded on 03/01/2012 for the course ACCOUTNING 550 taught by Professor Abner during the Spring '11 term at DeVry Houston.

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Exam3 FIN370 A Key (2) - Exam3 FIN370 Winter 2009 Key...

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