managerial finance quiz

Question 1

1. Mansi Inc. is considering a project that has the following cash flow data. What is the project's payback?

   Year 0 1 2 3

   Cash flows -$750 $300 $325 $350

   		2.36 years
   		2.59 years
   		2.12 years
   		2.85 years
   		1.91 years

2 points

Question 2

1. ABC's current assets comprise of cash, accounts receivables, and inventory. ABC has $14,749 in cash, $6,066 in accounts receivables, and $3,231 in inventory. If the current ratio is 3 times, compute the quick ratio.

   Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

2 points

Question 3

1. Suppose you invest $27,438. If the interest rate is 12% compounded quarterly for the first 10 years and 11% compounded monthly for the next 5 years, what is the future value after 15 years?

   Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

2 points

Question 4

1. If you receive $662 at the end of each year for the first two years and $645 at the end of each year for the next two years.
   Assume interest rate is 9%.What is the value at the end of the 4th year? That is. solve for FV at the end of the 4th year.
   
   

   Note: Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

2 points

Question 5

1. You are given the following information about ABC Company:
   Interest expenses = $8,101
   Times Interest Earned Ratio = 2.8 times
   Tax Rate = 39.2%

   What is the net income?

   Enter your answer rounded off to two decimal points.

2 points

Question 6

1. ABC Company lists total assets of $4,483, current liabilities of $244 , long-term debt of $865 , and 203 shares of common stock. If the market price per share is $72, what is the market-to-book ratio?
   
   Enter your answer rounded off to two decimal points.

2 points

Question 7

1. ABC Company has a debt-equity ratio of 0.67. What is the debt ratio?

   Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

2 points

Question 8

1. ABC Company earned $485,419 in taxable income for the year. How much tax does the company owe on this income?

   Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

2 points

Question 9

1. What is the effective rate of 13% compounded monthly?

   Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

2 points

Question 10

1. Your firm has the following balance sheet statement items: total current liabilities of $325,000; total assets of $3,655,000; fixed and other assets of $1,770,000; and long-term debt of $200,000. What is the amount of the firm’s net working capital?

   		$1,685,000
   		$1,080,000
   		$1,885,000
   		$1,560,000
   		$325,000

2 points

Question 11

1. ABC has the following data for the year ending 12/31/10: Net income = $600; Net operating profit after taxes (NOPAT) = $3,234; Total assets = $2,500; Short-term investments = $200; Stockholders' equity = $1,800; Total debt = $700; and Total operating capital = $6,349. ABC's weighted average cost of capital is 12%. What is its economic value added (EVA)?

   Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

2 points

Question 12

1. What is the net present value of the following cash flows? Assume an interest rate of 19.39%

   Year	CF
   0	-$13,675
   1	$6,268
   2	$6,996
   3	$9,654

   
   
   

   Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answers box.

2 points

Question 13

1. A firm has a return on equity of 33.9 percent, a net profit margin of 8.4 percent, and total equity of $733.9. What is the net income?

2 points

Question 14

1. Consider a taxable bond with a yield of 9.7% and a tax-exempt municipal bond with a yield of 6.1%. At what tax rate would you be indifferent between the two bonds?

   Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

2 points

Question 15

1. In its most recent financial statements, ABC reported $59,511 of net income and $698,862 of retained earnings. The previous retained earnings were $723,622. How much in dividends was paid to shareholders during the year?

   Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

2 points

Question 16

1. Find the payback period for a project that requires investment of $30 and returns $11 every years for 7 years.

2 points

Question 17

1. Calculate the NPV of a project that requires investment of 937 and provides the cashflows of 104, 232, 294, 272 in the next 4 years. The relevant discount rate is 12%. (All numbers are in dollars)

2 points

Question 18

1. Calculate the project's IRR.

   Do not write the '%' sign in your answer. If the answer is 12.45%, you will enter 12.45

   
   

   Year	0	1	2	3	4
   Cash flows	?$1,050	$400	$400	$400	$400