Financial Management 6460 Quiz week 2

Financial Management 6460 Quiz week 2 - (ROE) is 15%. If...

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Question 1 3 out of 3 points Which of the following statements is CORRECT? Answer Selected Answer: Both Nasdaq dealers and "specialists" on the NYSE hold inventories of stocks. Correct Answer: Both Nasdaq dealers and "specialists" on the NYSE hold inventories of stocks. Question 2 3 out of 3 points Last year Southern Chemicals had sales of $200,000, assets of $125,000, a profit margin of 5.15%, and an equity multiplier of 1.85. The CFO believes that the company could reduce its assets by $25,000 without affecting either sales or costs. Had it reduced its assets in this amount, and had the debt ratio, sales, and costs remained constant, by how much would the ROE have changed?
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Answer Selected Answer: 3.81% Correct Answer: 3.81% Question 3 3 out of 3 points The Merriam Company has determined that its return on equity
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Unformatted text preview: (ROE) is 15%. If its debt ratio is 0.35 and its total assets turnover is 2.8, what is the profit margin? Answer Selected Answer: 3.48% Correct Answer: 3.48% Question 4 3 out of 3 points Brooks Sisters' operating income (EBIT) is $500,000. The company's tax rate is 40%, its operating cash flow is $450,000, and its interest expense is $100,000. What is the company's net cash flow? (Assume depreciation is the firm's only non-cash revenue or expense.) Answer Selected Answer: $ 390,000 Correct Answer: $ 390,000 Question 5 3 out of 3 points Shop-Til-You-Drop Inc. recently reported net income of $5.2 million and depreciation of $600,000. What is its net cash flow? Assume it has no amortization expense. Answer Selected Answer: $5,800,000 Correct Answer: $5,800,000...
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Financial Management 6460 Quiz week 2 - (ROE) is 15%. If...

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