Review for Chapter 22 (2008)
The lack of correlation between an investment's return and the firm's other investments
45. suggests
a. the investment has little risk
b. portfolio effects may exist
c. the investment's beta coefficient is low
d. the investmen
Finance 3155 Exam 1
Summer Semester 2006
Dr. William A. Dowling
KEY
Instructions: You are to provide answers for each of the following questions. In order to receive
credit for any answer, you must appropriately demonstrate how you arrived at your solutio
Cardillo Travel System Case
Cardillo Travel System Case
Taniesha Maxwell
Professor Anthony Matias
ACC 562 Advanced Auditing
11/24/2014
Cardillo Travel System Case
In October, 1986, a well-known Los Angeles travel agency suddenly closed its doors.
Arnold W
The time value of money suggests
5. a. that the present is less attractive than the future
b. individuals prefer a dollar in the present to a dollar in the future
c. the present value of an annuity is negative
d. annuities are worth less than lump sums
Pr
No load mutual funds
80. a. have no selling fees
b. pay no cash dividends
c. have no administrative expenses
d. have a fixed portfolio
Problem
Quiz 3 - Preview - Spring 2008
What is the expected return on a stock if the firm will earn 24% during a period
A firm should not make an investment if the internal rate of return is
25. a. greater than the cost of capital
b. less than the cost of capital
c. greater than the interest rate
d. less than the interest rate
Problem
Quiz 3 - Review - Chapters 8 -18,28 &2
Make-up Review - Spring 2008
Small standard deviations for cash inflows
75. a. reduces an investment's net present value
b. increases an investment's internal rate of return
c. increases the firm's cost of capital
d. implies more certainty
Problem
You bou
Review for Exam 2 - Chapters 6 - 11
An increase in investors' required return should cause the value of a common stock to
70. a. rise
b. fall
c. remain unchanged
d. remain stable or rise slightly
Problem
If you open an individual retirement account (IRA)
Practice Quiz for Chapters 1 - 6
Which of the following causes a currency inflow?
35.
1.
2.
3.
4.
a.
b.
c.
d.
foreign travel and foreign investments
domestic travel by foreigners
dividend payments from foreign corporations
dividend payments to foreign inv
Review for Chapter 19 (2008)
A major weakness with the payback method is it failure to
21. a. consider the cost of an investment
b. consider an investment's cash inflows
c. employ the firm's cost of funds (capital)
d. rank investments
Problem
The price of
Chapter 15 Review
True/False
Indicate whether the statement is true or false.
Firms hold cash balances in order to complete transactions that are necessary in
1. business operations and as compensation to banks for providing loans and services.
T
ANSWER:
Q4 Review - Spring 2008
The use of certainty equivalents means
50. a. the investment's cash inflows are certain
b. an investment's cash inflows are expressed as if they were certain
c. the cost of capital is known
d. the probability of occurrence is certa
Chapter 3 Review
True/False
Indicate whether the statement is true or false.
The existence of financial intermediaries greatly increases the efficiency of
1. financial markets because, without them, savers would have to provide funds
directly to borrowers
The marginal cost of capital
28. a. is the firm's cost of debt and equity finance
b. is constant given an optimal capital structure
c. declines as flotation costs alter equity financing
d. refers to the cost of additional financing
Problem
a.
Given the fo
Final Quiz Review
A firm should not make an investment if the internal rate of return is
25. a. greater than the cost of capital
b. less than the cost of capital
c. greater than the interest rate
d. less than the interest rate
Problem
A bond has the follo
Chapter 8 Review
True/False
Indicate whether the statement is true or false.
If we develop a weighted average of the possible return outcomes, multiplying each
1. outcome or "state" by its respective probability of occurrence for a particular stock,
we ca
Chapter 4 Review
True/False
Indicate whether the statement is true or false.
Cash flow time lines are used primarily for decisions involving paying off debt or
1. investing in financial securities. They cannot be used when making decisions about
investmen
Chapter 10 Review
True/False
Indicate whether the statement is true or false.
Net incremental operating cash flow is calculated by adding back the change in
1. depreciation to the change in income after taxes.
T
ANSWER:
0/1
POINTS:
FEEDBACK:
REF:
A key di
Chapter 14 Review
True/False
Indicate whether the statement is true or false.
The fact that no explicit interest cost is paid on accruals and that the firm can
1. exercise considerable control over their level makes accruals an attractive source of
additi
Chapter 11 Review
True/False
Indicate whether the statement is true or false.
Capital refers to items on the right-hand side of a firm's balance sheet.
1.
T
ANSWER:
0/1
POINTS:
FEEDBACK:
REF:
The firm's cost of external equity capital is the same as the r
Chapter 5 Review
True/False
Indicate whether the statement is true or false.
The nominal rate of interest is defined as the sum of the nominal risk-free rate of
1. return and the expected inflation rate.
ANSWER:
F
rNom = rRF + DRP + LP + MRP.
0/1
POINTS:
Chapter 2 - Review
True/False
Indicate whether the statement is true or false.
The balance sheet is a financial statement measuring the flow of funds into and out
1. of various accounts over time while the income statement measures the progress of
the fir
Chapter 6 Review
True/False
Indicate whether the statement is true or false.
Typically, debentures have higher interest rates than mortgage bonds primarily
1. because the mortgage bonds are backed by assets while debentures are unsecured.
T
ANSWER:
0/1
PO
Chapter 7 Review
True/False
Indicate whether the statement is true or false.
A firm cannot change its beta through any managerial decision because betas are
1. completely market determined.
F
ANSWER:
0/1
POINTS:
FEEDBACK:
REF:
In the real world, the type
Chapter 1 - Review
True/False
Indicate whether the statement is true or false.
A hostile takeover involves an attempt by one group of stockholders to solicit votes
1. from other stockholders in order to put a new management team into place and is
usually
FINC3155- Business Finance
Homework VII
1. A corporate bond is quoted at a current price of 102.767. What is the market price of a
bond with a $1,000 face value?
2. Your firm offers a 10-year, zero coupon bond. The yield to maturity is 7%. What is the
cur
FINC3155- Business Finance
Homework III
(Bond Valuation)
Ashley Reese
1. A corporate bond is quoted at a current price of 102.767. What is the market price of a
bond with a $1,000 face value?
2. Your firm offers a 10-year, zero coupon bond. The yield to m
FINC 3155- Business Finance
Homework IV
1. Six months ago, you purchased 1,200 shares of ABC stock for $21.30 a share. You have
received dividend payments equal to $.60 a share. Today, you sold all of your shares for
$22.70 a share. What is your total dol
FINC3155
Business Finance
Homework II-Time Value of Money
1.
Find the future value of todays $500 in 5 years under each of the following conditions:
a. 12% nominal rate, annual compounding
b. 6% nominal rate, annual compounding
c. 3% nominal rate, annual
FINC3155- Business Finance
Homework III
(Bond Valuation)
1. A corporate bond is quoted at a current price of 102.767. What is the market price of a
bond with a $1,000 face value?
2. Your firm offers a 10-year, zero coupon bond. The yield to maturity (inve