Ch 03 Inclass Exercises Solutions
Chapter 03 Inclass Exercise Statement of Changes
Cost of Goods Sold
Statement of Cash Flows
Ch21 C HW Solutions
1. International bonds issued in a single country and denominated in that country's currency are called:
A. Treasury bonds.
D. Brady bonds.
E. foreign bonds.
Refer to section 21.1
2. The price of one Euro expres
CF Quiz 1 Ch 07 Key
1-1. Mary just purchased a bond which pays $60 a year in interest. What is this $60 called?
B. face value
D. call premium
Refer to section 7.1
2-6. The current yield is defined as the annual interest on a
CF Quiz 1 Ch 06 Key
1-1. An ordinary annuity is best defined by which one of the following?
A. increasing payments paid for a definitive period of time
B. increasing payments paid forever
C. equal payments paid at regular intervals over a stated time peri
1. A group of individuals got together and purchased all of the outstanding shares of common stock of DL Smith, Inc.
What is the return that these individuals require on this investment called?
A. dividend yield
B. cost of equity
CF Quiz 1 Ch 04 Key
1-1. Phil is working on a financial plan for the next three years. This time period is referred to as which one of the
A. financial range
B. planning horizon
C. planning agenda
E. current financing period
1. The difference between a firm's future cash flows if it accepts a project and the firm's future cash flows if it does not
accept the project is referred to as the project's:
A. incremental cash flows.
B. internal cash flows.
1. A project has an initial cost of $27,400 and the present value of the estimated cash inflows is $32,600. What is the
difference between these two values called?
A. net present value
B. internal return
C. payback value
1. GT Motors regularly issues short-term debt to finance its daily operations. Suddenly, the credit markets froze and no funds
were available for borrowing. Fortunately, the firm had some cash reserves saved that it was able to use to
CF Quiz 1 Ch 03 Key
1-1. Activities of a firm which require the spending of cash are known as:
A. sources of cash.
B. uses of cash.
C. cash collections.
D. cash receipts.
E. cash on hand.
Refer to section 3.1
2-7. The U.S. government coding system that cl
Ch 21 Inclass Exercises Solutions
1. If it takes 1.45 Krone to purchase 1 US dollar, how many dollars buys one Krone?
=1/1.45 = US 0.6896
2. Suppose you visit Japan and spend 150,000 in yen at 110.55 Yen per dollar. Then you visit Thailand and sp
Ch 19 / 20 Inclass Exercises Solutions
1. What is the difference between disbursement float and collection float?
Generated when a firm writes checks
Available balance at bank > book balance
Checks received increa
1. The length of time between the purchase of inventory and the receipt of cash from the sale of that inventory is called the:
A. operating cycle.
B. inventory period.
C. accounts receivable period.
D. accounts payable period.
E. cash cy
Ch 18 Inclass Exercises Solutions
1. What are the differences between flexible and restrictive short-term financial policies?
Large amounts of cash and marketable securities
Large amounts of inventory
Liberal credit policies (large account
Ch 18 HW C Solutions
Prepare a quarterly cash budget for the ABC corporation.
Projected quarterly sales are:
Accounts receivable at the beginning of the year are $ 3,000. The firm has a 30 day avera
Ch 14 Inclass Exercises Solutions
1. Exercise: Cost of Equity using Dividend Constant Growth Model (DGM)
Suppose that your company is expected to pay a dividend of $2.00 per share next year. There has been a steady growth in
dividends of 6% per year and t
Ch 11 Inclass Exercises Solutions
ABC is considering a 5 year project costing $480,000. The price estimate is $60 plus or minus 4%. The unit sales are
projected to be 8,000 plus or minus 5%. The variable cost per unit is estimated to be
Ch 10 Inclass Exercises Solutions
Relevant Cash Flows
1. Your firm is considering converting an old plant to produce a new product. It purchased this plant 8 years ago for $3
million. It will cost $10 million to convert this plant and additional $1 millio
Ch 10 HW A Solutions
1. Initial cash flow = $6.51 million + $9.80 million + $0.90 million = $17.21 million
$0.32 million is sunk cost and not taken into consideration.
2. Using stand alone project principle, the annual sales figure for evaluating the proj
Ch 09 HW A Solutions
1. Payback period = 2 + 6,500 / 9,000 = 2.72
2. Payback period for A = 2 + 8,000 / 16,000 = 2.50
3. Payback period for B = 3 + 26,000 / 100,000 = 3.26
5. = 15.06%
6. Yes, accept the project because IRR is
CF Quiz 1 Ch 08
1-1. What is the model called that determines the present value of a stock based on its next annual dividend, the dividend
growth rate, and the applicable discount rate?
A. zero growth
B. dividend growth
C. capital pricing
D. earnings capi
Ch 08 Inclass Exercises Solutions
ABC is expected to pay a dividend of $2.50 next period and dividends are expected to grow at 4% per year. The required
return is 10%.
1. What is the estimated current price? (41.67)
To find a current price