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TCO 1) Which of the following statements is not true regarding the goal of financial management?

TCO 1) Which of the following statements is not true regarding the goal of financial management? (Points : 3)
The goal of maximizing the value per share of existing stock is relevant to all organizations.
A way of aligning management goals to shareholder’s interest is to tie managerial compensation to the market value of the firm’s stock.
For a company considering international operations, the goal will be the same but the company will have to consider the local social, economical and political environment in the decision-making process.
All of the above are true.


2. (TCO 1) Book values are different to market values because: (Points : 3)
Book values reflect the value of the asset based on generally-accepted accounting principles.
Book values are used in the company's balance sheet.
Book values do not reflect the amount someone is willing to pay today for an asset.
All of the above


3. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends paid..................................... $150,000
(TCO 1) Suppose that Sports Baseball has 30,000 shares of stock. What is the dividends per share figure?

(Points : 3)
5.0
8.75
5.25
8.50


4. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends paid..................................... $150,000
(TCO 1) Assuming a tax rate of 30%, what is the EBIT and taxable income for the year?

(Points : 3)
$1,000,000 and $800,000 respectively
$575,000 and $375,000 respectively
$565,000 and $365,000 respectively
$425,000 and $225,000 respectively
None of the above


5. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:
Cost of goods sold............................... $1.2 million
Administrative expenses........................ $250,000
Marketing and selling expenses............... $175,000
Depreciation........................................ $500,000
Interest expense.................................. $200,000
Dividends paid..................................... $150,000
(TCO 1) Select all items that will be included in Sports Baseballs, Inc. Balance Sheet. For this exercise you will be choosing more than one option for your answer:

(Points : 3)
Cash on hand
Fixed assets
Net sales
Administrative expenses
Taxes
Long-term debt
Dividends paid
Marketing expenses
Consulting revenues


6. (TCO 1) Which one of the following activities best exemplify working capital management. For this exercise you will be choosing more than one option for your answer: (Points : 6)
Identify three good investment opportunities for the firm.
Obtain a short-term loan to purchase materials.
Assess the level of inventory to be kept on hand.
Sale long-term bonds to raise funds for a new machine.
Determine the return of a potential project.
Calculate the cash flows for a project.
Manage payments to suppliers.


7. (TCO 1) Match the following terms with the examples as appropriate:
(Points : 4)
Answer Potential Matches:
: Insider trading 1 : McDonald's work to redesign packaging items with recyclable materials.
: Social responsibility 2 : Microsoft's monopolistic behavior.
: Sarbanes-Oxley Act 3 : Martha Stewart's sale of ImClone stock as result of information provided by the company's CEO before an announcement was made public that significantly decrease ImClone's stock price.
: Fraud 4 : Parmalat's deliberate fraudulent accounting practices.
: Antitrust case 5 : established an oversight board responsible for improving auditing standards within companies.


8. (TCO 1) Can you provide some examples of situations in which business ethics play a role in the financial management process? (Points : 5)

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