Business Finance 620 Practice Exam 1
_
1. Which of the following statements provides the most plausible explanation for a company whose
statement of cash flows exhibits an increase in the ending cash balance, at the same time cash
flows from both operatio
8.
The data in the Excel spreadsheet linked below give the average exchange
rates of four currencies to the US dollar during October 2002.
Over this period, which currency was most volatile relative to the US dollar, as
measured by the coefficient of vari
Business Finance 620
Sample Final Exam 1
1. The decision rule for net present value is to:
A) accept all projects with cash inflows exceeding initial cost.
B) reject all projects with rates of return exceeding the cost of capital.
C) accept all projects w
If you want the formulas and any calculations, select the corresponding cell and press F2(Function Key on key board),
It will show all calculations and formulas Automatically
Question:
Suppose that a stock gave a realized return of 20% over a two-year tim
Chapter 1. Environment and
Theoretical Structure of Financial
Accounting
The Bottom Line
LO11
Financial accounting is concerned with providing relevant
nancial information to various external users. However, the
primary focus is on the nancial informatio
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Chapter 2. Review of the Accounting
Process
Chapter 2 Sections
The Bottom Line
LO2
1
LO2
2
LO2
3
The accounting equation underlies the process used to capture
the effect of economic events. The equation (Assets =
Liabilities + Owne
Chapter 05 - Introduction to Valuation: The Time Value of Money
Chapter 05
Introduction to Valuation: The Time Value of Money
Multiple Choice Questions
1. You are investing $100 today in a savings account at your local bank. Which one of the
following ter
Chapter 06 - Discounted Cash Flow Valuation
Chapter 06
Discounted Cash Flow Valuation
Multiple Choice Questions
1. An ordinary annuity is best defined by which one of the following?
A. increasing payments paid for a definitive period of time
B. increasing
Busfin 3220 Quiz 5
Gonzales Corporation generated free cash flow of $88 million this year. For the next two
years, the company's free cash flow is expected to grow at a rate of 8%. After that time,
the company's free cash flow is expected to level off to
Time Warner shares have a market capitalization of $50 billion. The company is expected
to pay a dividend of $0.30 per share and each share trades for $30. The growth rate in
dividends is expected to be 7% per year. Also, Time Warner has $15 billion of de
Chapter 1. Environment and
Theoretical Structure of Financial
Accounting
Evolving GAAP
Earlier in this chapter you learned that the convergence of accounting
standards with international standards is having a profound effect on nancial
reporting in the Un
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Chapter 2. Review of the Accounting
Process
Chapter 2 Sections
The Accounting Processing Cycle
Now that we've reviewed the basics of the double-entry system, let's look
closer at the process used to identify, analyze, record, and s
11.
In a recently administered IQ test, the scores were distributed normally, with
mean 100 and standard deviation 15.
What proportion of the test takers scored between 70 and 130?
Source
About 68%.
About 84%.
#
About 95%.
About 99.5%.
12.
Which of the fo
14.
A nutrition researcher wants to determine the mean fat content of hen's eggs.
She collects a sample of 40 eggs. She calculates a mean fat content of 23 grams,
with a sample standard deviation of 8 grams. From these statistics she
calculates a 90% conf
4. The histogram below plots the carbon monoxide (CO) emissions (in
pounds/minute) of 40 different airplane models at take-off.
Which of the following statements is the best inference that can be drawn from
this histogram?
Source
$
The mean amount of carb
1.
The median is often a better representative of the central value of a data set when
the data set:
Is bimodal.
Has a high standard deviation.
Is highly skewed.
Has no outliers.
2.
The data in the Excel spreadsheet linked below provide information on the
BF 620 Ch5 Practice Problems
1.
A ten year bond with maturity value of $1000 and yearly coupon of 7.8% has 6
years to maturity. If the investors required return falls from 8.1% to 7.7%
overnight, What is the change in value of the bond?
decrease of $32.14
1
ANS: C from Chapters 1-2
2
ANS: A from Chapters 1-2
(A) is not a true statement because commercial paper is traded in the money
market. The other three statements are all correct.
3
ANS: A from Chapters 1-2
Unless the company is a party to the transacti
30
ANS: B from Chapter 11
Rate of total return = Dividend yield + Capital gains yield
13.7% = 5.5% + Capital gains yield
Capital gains yield = 8.2%
Capital gains yield is simply the change in price during the year. Thus:
0.082
0 082 = (40 Price Today) / P
Weinstock & Rives
ID: S
Business Finance 620 SAMPLE Exam 1
INSTRUCTIONS:
This sample exam contains questions representative of those used on Exam 1. An answer key follows the
questions; chapter references in the key are based on the 5th edition of the tex
Weinstock & Rives
ID: S
Business Finance 620 Exam 2 SAMPLE
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1. You invested $5,500 in a bond mutual fund three years ago today. During the first year you owned
the fund, you lost $386 due to rising interest rates. However, during your three-year holding
Business Finance 620 Practice Final Exam
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1. Your firm has a portrait of the company founder that originally cost $250, has an undepreciated
book value of zero, and is worth an estimated $175,000 because the artist is famous. Last week,
the Ann Arbor Mus
Business Finance 620
Exam 1 Formula Sheet
PROFITABILITY RATIOS
Operating Profit Margin:
(Net Income + Interest) / Sales
Return on Equity (ROE):
Net Income / Average Equity
Return on Assets (ROA):
(Net Income + Interest) / Average Total Assets
Return on Ca
Business Finance 620 Practice Exam 2
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1. If the market yield on comparable debt is 5.405%, how much should an investor expect to pay for
an A-rated corporate bond with a 6.145% annual coupon, nine years to maturity and a $1,000 par
value?
A. $1,000
B. $9
Chapter 7 problems
1. Suppose a company will pay a $3.20 annual dividend on its common stock
over the coming year, and management plans on raising this dividend by 6%
per year indefinitely. If the required return on this stock is 12%, what is the
current
Chapter 8 Problems
1. Consider the following two mutually exclusive projects:
Year Cash Flow (A)
Cash Flow (B)
0
-$350,000
-$50,000
1
65,000
25,000
2
65,000
25,000
3
65,000
25,000
4
440,000
25,000
Whichever project you choose, if any, you require a 15% re
Chapter 6 problems
1. One More Time Software has 9.2% coupon bonds on the market with 9 years
to maturity. The bonds make semiannual payments and currently sell for
106.8% of par. What is the current yield on the bonds? The YTM?
n=2x9=18
i/y=*4.06%*
pv=1.
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Chapter 2. Review of the Accounting
Process
Chapter 2 Sections
Adjusting Entries
LO24
Chapter 2 LO2-4 Narrated PowerPoint
Step 6 in the processing cycle is to record in the general journal and post to
the ledger accounts the effec
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Chapter 2. Review of the Accounting
Process
Chapter 2 Sections
Conversion from Cash Basis to Accrual Basis
LO28
Chapter 2 LO2-8 Narrated PowerPoint
In Chapter 1, we discussed and illustrated the differences between cash and
accrua
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Chapter 2. Review of the Accounting
Process
Chapter 2 Sections
The Closing Process
At the end of any interim reporting period, the accounting processing cycle is
now complete. An interim reporting period is any period when nancial