MGMT 130 Midterm Exam Winter Quarter 2010
Name: _
Section: _
Multiple Choice For each question below, circle the best answer. Each question is worth 2 points.
1) You have $500 to invest. You have two choices: Savings Account A which earns 8% compounded an
Note: This exam tests on some material that was taught in 2011 but we did not cover
in 2013. The 2013 exam will not cover material that we did not discuss in class.
MGMT 130 Final Exam
Winter Quarter 2011
Name:_
Section: _
Short Answer
1. List three of th
Chapter 2: Concept Questions 1, 5, 10; Problems 5, 8, 9, 10, 13, 20
Concept Questions:
1. Liquidity What does liquidity measure? Explain the trade-off a firm faces between high
liquidity and low liquidity levels.
+
Chapter 5
Net Present Value and Other Investment Rules
Prof. Ehud Peleg
+
Outline
The
Payback Period Method
The
Discounted Payback Period Method
The
Internal Rate of Return
Problems
The
with the IRR Approach
Profitability Index
5-2
+
The Net Present Val
Chapter 5: Sample Problems
1. Stone Sour, Inc., has a project with the following cash flows:
Year
Year 0
Year 1
Year 2
Year 3
Cash Flows
$ (20,000)
$ 8,500
$ 10,200
$ 6,200
The company evaluates all projects by applying the IRR rule. If the appropriate in
Chapter 4: Sample Problems
1. Although appealing to more refined tastes, art as a collectible has not always performed so
profitably. During 2010, Deutscher-Menzies sold Arkies under the Shower, a painting by
renowned Australian painter Brett Whiteley, at
+
Chapter 6
Making Capital Investment
Decisions
Prof. Ehud Peleg
+
Outline
Relevant
Capital
Cash Flows
Investment Example
Inflation
and Capital Budgeting
Alternative
Some
Definitions of Operating Cash Flow
Special Cases of Discounted Cash Flow Analys
+
Chapter 2
Financial Statements and Cash Flow
Prof. Ehud Peleg
+
2
+
Investors are concerned about miniscule
profits.
Actually, the company is generating
tremendous amounts of cash from
operations.
Free cash flow, which accounts for
investments, is al
+
Chapter 3 (B)
Financial Modeling
Prof. Ehud Peleg
+
Lecture Outline
Financial
External
Models
Financing and Growth
Some
Caveats Regarding Financial Planning
Models
2
+
Decisions Made by the Firm
Investment in new assets determined by capital
budgeting d
+
Chapter 4
Discounted Cash Flow
Prof. Ehud Peleg
+
Lump Sum or Annuity Payout?
2
+
Outline
Valuation:
The
The One-Period Case
Multi-period Case
Compounding
Repeated
Periods
Cash Flows
Loan Amortization
3
+
The One-Period Case
If you were to invest $10,00
Question 9 In the most recent yearWholesome Foodsellers reported $7,000 in sales with a 20% prot margin. The rm has $17,000 in assets.
Answers-1" Next yearthe rm plans a 10% increase in sales. Assets and costs are proportional to sales. Debt and equity ar
Question 3
Answersaved
Poinlsout of
1.00
iFha
question
Critter corp. prepared the Following nancial statements forvear-end 2014.
Income
Statement
2014
Revenue $750
Expenses 562
Depreciation 93
Net Income 95
Dividends 75
Balance Sheets - End of Year
2014 2
Question 2 The 2013 balance sheet of Pizzeria Libretto showed long-term debt of $1.4 million. and the 2014 balance sheet showed long-term
Answersaued debt of $1.7 million. The 2014 income statement slwwed an interest expense of $1335 95.What was the rm's
Question 1
Answer saved
Poinisoutof
1.00
1 Flag
question
Carley, Inc. has sales of $427326, costs of $156072, depreciation expenses of $27414, interest expenses of $191.03. and a tax rate
of 35%. Suppose the company paid out $31315 in cash dividends. W'i'
Question 1'0 Given the following nancial ratios, what is the corn panys sustainablegromh rate?
Ansmrsmd Total asset to rmver = 1.5
:33 tm Prot margin = 696
17 Flag Equity multiplier = 1.5
question
Payout ratio = 35%
Select one:
If] ai
(j. moses
f: .1295
3
Question4 A oon'urmrrylI reported $185111 in sales. total assets of $2303, and a debt-equity ratio of 0.5. If its return on equity is 19%. what is
Ansmrsmd the rms net income?
Points outoi
1.00 Seiect one:
I? Flog IT] a. $12331
question (3| b. $3405
-T.-
Question 7 Uberville Drivers Inc. reported $750,000 in sales in the recent year, $650,000 in costs and $10,000 in interest The rm's tax rate is
msmrsmd 34%, and recent year's dividend payment was $34,400.
Points outof The companyr is planning to grow by 2
Question 3
Answer saved
Points out of
1.00
1" Flag
question
The Pelican Corporation provided the following information for 2014. in $ millions:
Proceeds from long-term borrowing
Proceeds from sale ofcommon stock
Net sales afxed assets
Purchases of invento
Question 6 Burrito Bell has net income of$320,UDD and a prot margin of 10%. its account receivables balance is $120,000.
ANSWEFSMC' Assuming 75% of sales are on credit. what is the companys days' sales in reoeiva bias?
Points nutuf
1.00 13.25 3
'F Flag
qu
Calculating Returns
and Discounted
Cash Flow
Returns have two components:
Current Income (e.g., interest or dividends); and,
Capital Gains (or Losses)
Returns can be expressed in dollar or, more
commonly, percentage terms.
Dollar Returns:
the sum of the
An Nguyen
MGMT 130A Homework 2
Question 1:
Year
2007
2008
2009
Cash Flow
5
17
17
DF
1
1.045
1.092025
Present Value
5 16.26794258 15.56740917
Total
Thus, the PV for the stream of income is $79.63M.
2010
17
1.141166125
14.89704227
2011
17
1.192518601
14.255
MGMT 130A Winter 2013
Homework #3: Cost of Capital
Name: _
Section: _
Due date: March 15th
Return in class on March 13th; or to my box in D413 by the end of the day on March 15th; or via
email by end of day on March 15th.
Use the following information to
MGMT 130 Lecture 10
Risk and Return
How to Calculate Returns
Dollar Return = Dividend + Change in Market Value % Return = $ Returns / Beginning Market Value = Income Yield% + Capital Gain% Holding Period Return = (1 + R1) x (1 + R2) x x (1+ RT) -1
Total
MGMT 130 Lecture 9
Capital Investment Decisions
Relevant Cash Flows Relevant
The cash flows that should be included in a capital budgeting analysis are those that will only occur if the project is accepted These cash flows are called incremental cash flo
MGMT 130 Lecture 8
Net Present Value and Capital Budgeting Decision Rules
NPV Analysis
The recommended approach to any significant capital budgeting decision is NPV analysis.
The NPV rule appropriately accounts for the opportunity cost of capital and so
MGMT 130 Lecture 7
Stock Valuation
Value of Stocks
Stocks are residual claims on future cash flows. As with bonds, or any other financial instrument, their price is determined by the present value of those future cash flows. However, those cash flows are