Business finance final exam pt.1
Business Finance Final Exam Quiz
Test your knowledge on essential business finance concepts with this engaging quiz! Whether you're a student preparing for exams or a professional brushing up on your finance skills, this quiz covers key topics in a fun and interactive way.
Key Features:
- Multiple choice questions with instant feedback
- Covers a wide range of finance topics
- Perfect for self-assessment and learning
If projects a and b are acceptable, but the selection of either one of these projects eliminated the option of selecting the other project
Modified irr
Mutually exclusive
The discount rate that makes the net present value of an investment equal to zero
Net present value
Internal rate of return
The present value of an investments future cash flows divided by its initial cost
Profitability index
Yield to maturity
The amount of time required for an investment to generate cash flows sufficient to recover its initial costs
Payback period
Discount bond
The methodology used to compute the rate of return on a project that have multiple negative cash flows that are interrupted by one or more positive cash flows
Modified irr
Multiple rate of return
Agreement giving the corporation the opportunity to repurchase a bond at a specified price prior to maturity
Call provision
Profitability index
The current value of future cash flows discounted at the appropriate interest rate
Future value
Present value
interest earned on both the principal and the interest reinvested from prior periods
Compound interest
Rate of return
The ___ is the financial statement that shows a firms accounting value as of a particular date in time
Common size statement
Balance sheet
a (n) is a business created as a distinct legal entity owned by one or more individuals or entities
Corporation
Sole proprietorship
a is the possibility of conflict of interest between the owners and management of a firm
Du-point identity
Agency problem
No cumulative preferred
______ratios provide information about the firms liquidity and their ability to meet its short-term obligations
Non cash items
Short term solvency
____measure how efficiently the firm uses its assets and how efficiently it manages its operations
Enterprise value
Profitability ratios
The ____ is the maximum possible growth rate a firm can achieve without external equity financing while maintaining a constant debt equity ratio
Sustainable growth rate
Marginal tax rate
The tax rate that determines the amount of tax that will be due on the next dollar of taxable income
Sustainable growth rate
Marginal tax rate
A company’s __is an estimate of the value of the firms operating assets
Financial management
Enterprise value
The ____ is the financial statement that summarizes a firms performance over a period of time
Income statement
Balance sheet
The goal of ____is to maximize the current value per share of the existing stock
Capital budgeting
Financial management
____is the process of planning and managing a firms long term investments
Capital budgeting
Financial management
The _____ can be used to determine the degree of financial leverage, operating efficiency, and asset utilization of a firm
Du point identity
Agency problem
Payton enterprises bonds have a 19 year maturity , a 7.80 percent annual coupon rate , with semi annual payments, and a par value of $1,000. The going interest rate (rd) is 6.82 percent. What id the bonds price?
Cpt +pv = -$1,103.51
Cpt +pv = -$1,203.51
Jpo industries has a bond outstanding with 15 years to maturity, a 7.60 percent nomim coupon, semiannual payments, and a $1,000 par value. The bond currently sells for $1,021.08. What is the bonds nominal yield to maturity ?
Cpt +i/y = 8.366
Cpt +i/y= 7.366
jackson enterprises is considering a project that has the following cash flow and cost of capital (rd) data : (rd) = 11.40% cfo: -$265,200, C01= $83,000, C02= $92,400, C03= 102,460, C04= $137,400. What is the projects npv?
Cpt+npv = $47,093.02
Cpt+npv = $45,093.02
edison electric systems is considering a project that has the following cash flow data: rd=10% cfo= -$1,402,150, c01= $283,560, c02=$528,460, co3= $854,890, c04= $304,200. What is the projects irr? Note that a projects projected irr can be less than the cost of capital(and even negative) in which case it will be rejected.
Cpt+irr = 14.34
Cpt+irr= 15.34
The Black horse is currently considering a project that will produce cash inflows of $17,600 a year for three years followed by $28,500 in year 4. The cost of the project is $61,800. What is the profitability index if the discount rate is 8.2 percent?
Cpt+npv= 1.0768or 1.077
Cpt+npv= 1.0678 or 1.068
Xyz company bonds currently sell for $1,095 and have a par value of $1,000. The bonds have a 10 percent coupon rate, semiannual payments, and 15- year maturity but the can be called in 7 years at $1,200. What is the bonds yield to call?
Cpt +ytc(i/y)=5.94
Cpt +ytc(i/y)= 5.84
Talley dental associates is considering a project that has the following cash flow data: (rd) = 10%, Cf0: -63,200, c01= $16,000, c02=$18,000, co3= $17,600, c04= $14,680. What is the projects payback period?
3.690
3.790
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