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ACCT 304 Chapter 3 Quiz Complete Answer

ACCT 304 Chapter 3 Quiz Complete Answer

ACCT 304 Chapter 3 Quiz Complete Answer

ACCT 304 Ch.3 Quiz

1. Income from continuing operations sometimes includes gains from nonoperating activities. (2 points)

True

False
2. Income from continuing operations is an after-tax number consisting of revenues, expenses, gains, and losses. (2 points)

True

False
3. Income from continuing operations equals net income only in the absence of separately reported items. (2 points)

True

False
4. Intraperiod tax allocation is the process of associating income tax effects with the income statement components that create those effects. (2 points)

True

False
5. If the effective tax rate is 40%, a $200,000 before-tax extraordinary gain would increase net income by $120,000. (2 points)

True

False
6. If General Motors ceased production of the Corvette, it would report any material gains or losses that would result under discontinued operations. (2 points)

True

False
7. Discontinued operations require reclassification of prior years’ income statements but no change in prior years’ net income. (2 points)

True

False
8. Operating income or loss from discontinued operations up to the disposal date is separately reported. (2 points)

True

False
9. The measurement and disposal dates of discontinued operations must fall within the same fiscal year. (2 points)

True

False
10. If an overall loss from discontinued operations is expected, then the loss is reported in the year in which the measurement date falls. (2 points)

True

False
11. Estimated gains from discontinued operations can be reported in the measurement year only to the extent of estimated losses. (2 points)

True

False
12. An item must meet the subjective criteria of being both unusual and infrequent to be reported as extraordinary. (2 points)

True

False
13. The definition of what constitutes an extraordinary item should be independent of the operating environment. (2 points)

True

False
14. Material restructuring costs are reported as an element of income from continuing operations. (2 points)

True

False
15. The cumulative effect of a change in accounting principle is the difference between the ending balance in retained earnings and what the balance would have been had the new method been applied all year. (2 points)

True

False
16. A change in reporting entity is shown separately on the income statement in the year of the change. (2 points)

True

False
17. All corporations must disclose EPS. (2 points)

True

False
18. EPS disclosure is required for all items reported net of tax on the income statement. (2 points)

True

False
19. Net income is the starting point in disclosing comprehensive income. (2 points)

True

False
20. Quality of earnings refers to the ability of reported earnings or income to predict future earnings. (2 points)

True

False
21. The distinction between operating and nonoperating income relates to: (2 points)
a.
Continuity of income.
b.
Principal activities of the reporting entity.
c.
Consistency of income stream.
d.
Reliability of measurements.
22. The principal benefit of separately reporting discontinued operations, extraordinary items, and cumulative effects of changes in accounting principles is to enhance: (2 points)
a.
Predictive ability.
b.
Consistency in reporting.
c.
Intraperiod continuity.
d.
Comprehensive reporting.
23. Interperiod income tax allocation relates primarily to the principle of: (2 points)
a.
Valuation.
b.
Going concern.
c.
Matching.
d.
Measurement.
24. An extraordinary event for financial reporting purposes is both: (2 points)
a.
Unusual and material.
b.
Infrequent and significant.
c.
Material and infrequent.
d.
Unusual and infrequent.
25. The cumulative effect of a change in accounting principle is reported as: (2 points)
a.
A restatement of retained earnings.
b.
A separate line component of income.
c.
A prior period adjustment.
d.
Income from modified operations.
26. The amount reported for the cumulative effect of a change in accounting principle is the net-of-tax difference between: (2 points)
a.
The current year’s income under the old principle and the current year’s income under the new principle.
b.
The current year’s ending retained earnings under the old principle and under the new principle.
c.
The preceding year’s ending retained earnings under the old principle and under the new principle.
d.
The current year’s beginning retained earnings under the old principle and the current year’s net income under the new principle.
27. The financial statement presentation of the cumulative effect of a change in accounting principle is most similar to that of reporting: (2 points)
a.
Changes in accounting estimates.
b.
Prior period adjustments.
c.
Correction of errors.
d.
Extraordinary items.
28. In its Dec. 31, 2000 financial statements, MisterCard estimated that losses on its current receivables would be $18.2 million. During 2001, MisterCard determined that the losses on the Dec. 31, 2000 receivables were actually $19.4 million. Ignoring taxes, MisterCard would report, in its 2001 financial statements, the additional $1.2 million loss on receivables as: (2 points)
a.
An extraordinary item.
b.
A prior period adjustment.
c.
A retroactive adjustment.
d.
A current year’s expense.
29. Which of the following is not true about EPS? (2 points)
a.
It must be reported by all corporations whose stock is publicly traded.
b.
It may be disclosed either on the face of the income statement or in a disclosure note.
c.
It must be reported separately for discontinued operations.
d.
It must be reported separately for extraordinary items.
30. The Gargas Corporation’s income statement includes net income, extraordinary items, and the cumulative effect of a change in accounting principle. Earnings per share information would be provided for: (2 points)
a.
Net income only.
b.
Extraordinary items and net income.
c.
The cumulative effect of a change in accounting principle and net income.
d.
Extraordinary items, the cumulative effect of a change in accounting principle, and net income.
31. A reconciliation between net income and comprehensive income would include: (2 points)
a.
Unrealized losses but not unrealized gains.
b.
Unrealized gains but not unrealized losses.
c.
Unrealized losses and unrealized gains.
d.
Neither unrealized losses nor unrealized gains.
32. Operating cash flows would exclude: (2 points)
a.
Interest received.
b.
Interest paid.
c.
Dividends paid.
d.
Dividends received.
33. The statement of cash flows reports cash flows from the activities of: (2 points)
a.
Operating, purchasing, and investing.
b.
Borrowing, paying, and investing.
c.
Financing, investing, and operating.
d.
Using, investing, and financing.
34. Cash flows from financing activities include: (2 points)
a.
Interest received.
b.
Interest paid.
c.
Dividends received.
d.
Dividends paid.
35. Changes in accounting estimates are reported: (2 points)
a.
Currently and prospectively.
b.
Retroactively and currently.
c.
Retroactively, currently, and prospectively.
d.
Prospectively.
36. Precepts Inc. incurred a material loss which was not unusual in character, but was clearly an infrequent occurrence. This loss should be reported as: (2 points)
a.
An extraordinary loss.
b.
A separate line item between income from continuing operations and income from discontinued operations.
c.
A separate line item within income from continuing operations.
d.
A separate line item in the retained earnings statement.
37. Sulvane Co. reports income of $300,000 from continuing operations before income taxes and a before-tax extraordinary loss of $80,000. All income is subject to a 30% tax rate. In the year’s income statement, Sulvane would show the following line-item amounts for income tax expense and net income: (2 points)
a.
$66,000 and $210,000.
b.
$90,000 and $154,000.
c.
$90,000 and $276,000.
d.
$66,000 and $220,000.
38. LeFever Construction Co.’s 2000 income from continuing operations before income taxes was $280,000. LeFever reported a before-tax extraordinary gain of $50,000. All tax items are subject to a 40% tax rate. In its income statement for 2000, LeFever would show the following line-item amounts for before-tax net income and income tax expense: (2 points)
a.
$198,000 and $112,000.
b.
$230,000 and $92,000.
c.
$330,000 and $132,000.
d.
$198,000 and $79,000.
39. Northridge Printers purchased an offset press on January 1, 1997 at a cost of $120,000. The press had an estimated eight-year life with no residual value Northridge uses straight-line depreciation. At December 31, 2000, Northridge estimated that the press would have only two more years of remaining life with no residual value. For 2000, Northridge would report depreciation expense of: (2 points)
a.
$25,000.
b.
$15,000.
c.
$20,000.
d.
$30,000.
40. Triptic Travel reported revenue of $300,000 for its year ended December 31, 2000. Accounts receivable at December 31, 1999 and 2000 were $32,000 and $35,500, respectively. During 2000, accounts totaling $1,500 were deemed to be uncollectible and were written off. Using the direct method for reporting cash flows from operating activities, Triptic would report cash collected from customers of: (2 points)
a.
$300,000.
b.
$295,000.
c.
$303,000.
d.
$302,000.
41. Arrow Printers paid $2,000 interest on short-term notes payable, $10,000 interest on long-term bonds, and $6,000 in dividends on its common stock. Arrow would report cash outflows from activities, as follows: (2 points)
a.
Operating, $2,000; financing $16,000.
b.
Operating, $0; financing $18,000.
c.
Operating, $12,000; financing $6,000.
d.
Operating, $18,000; financing $0.
42. Parvo Dog Food Co. reported net income of $45,000 for the year ended December 31, 2000. January 1 balances in accounts receivable and accounts payable were $23,000 and $26,000 respectively. Year-end balances in these accounts were $22,000 and $28,000, respectively. Assuming that all relevant information has been presented, Parvo’s cash flows from operating activities would be: (2 points)
a.
$48,000.
b.
$44,000.
c.
$46,000.
d.
$45,000.
43. Anthrax Beef Processors reported net income of $216,000 for its year ended December 31, 2000. Purchases totaled $152,000. Accounts payable balances at the beginning and end of the year were $36,000 and $33,000, respectively. Beginning and ending inventory balances were $44,000 and $46,000, respectively. Assuming that all relevant information has been presented, Anthrax would report operating cash flows of: (2 points)
a.
$155,000.
b.
$221,000.
c.
$211,000.
d.
$151,000.
44. In Case B, Alpha would report a gain or (loss) from disposal in 2000 of: (2 points)
a.
$40,000.
b.
$(10,000).
c.
$15,000.
d.
$65,000.
45. In Case C, Alpha would report a (loss) from disposal in 2000 of: (2 points)
a.
$(50,000).
b.
$(20,000).
c.
$(10,000).
d.
$0.
46. What would be Misty’s net income for the current year? (2 points)
a.
$148.
b.
$168.
c.
$112.
d.
None of the amounts given are correct.
47. In Case B, Omega would report a gain from disposal in 2000 of: (2 points)
a.
$75,000.
b.
$60,000.
c.
$100,000.
d.
$0.
48. In Case C, Omega would report a gain from disposal in 2000 of: (2 points)
a.
$30,000.
b.
$70,000.
c.
$100,000.
d.
$0.
49. In Case D, Omega would report a gain (loss) from disposal in 2000 of: (2 points)
a.
$30,000.
b.
$(40,000).
c.
$20,000.
d.
$0.
50. Rallod would report net cash inflows (outflows) from investing activities in the amount of: (2 points)
a.
$(4,000).
b.
$100.
c.
$(3,900).
d.
$(1,900).

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ACCT 304 Chapter 3 Quiz Complete Answer

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Why does the insurer often need the permission of the insured to settle claims Answer

Why does the insurer often need the permission of the insured to settle claims Answer

Why does the insurer often need the permission of the insured to settle claims Answer

1. Why does the insurer often need the permission of the insured to settle claims out of court for professional liability insurance claims? Provide an example.

2. Do you think professional liability policies should restrict their coverage to events that are “caused by accident”?

3. Use the internet to conduct some basic research on commercial umbrella policies. The respond to the following:
What kinds of a circumstances and exposures do commercial umbrella policies cover?

Section 3
Review the information on ESOPs at the National Center for Employee Ownership:http://www.nceo.org/. Also review the section in the textbook on ESOPs. 
How can this type of program give an organization an advantage when hiring employees? Can it also improve morale with current employees?.

Section 4
The global environment is affecting every business. Describe how having a multicultural workforce can impact a company in your industry. Why do you feel it is important to accommodate a multicultural workforce? How does diversity affect your everyday life?

Section 5
Do some research on Milton Friedman and Monetarism. Where do Monetarists and the Federal Reserve agree, and where do they disagree? Do you agree with the arguments the monetarists make about the Federal Reserve? Why or why don’t you agree?

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Why does the insurer often need the permission of the insured to settle claims Answer

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Suppose the term structure of risk-free interest rates is as shown below Answer

Suppose the term structure of risk-free interest rates is as shown below Answer

Suppose the term structure of risk-free interest rates is as shown below Answer

Suppose the term structure of risk-free interest rates is as shown below:
Term 1 year 2 years 3 years 5 years 7 years 10 years 20 years
Rate (EAR, %) 1.99 2.41 2.74 3.32 3.76 4.13 4.93
• a. Calculate the present value of an investment that pays $1000 in two years and $2000 in five years for certain.
• b. Calculate the present value of receiving $500 per year, with certainty, at the end of the next five years. To find the rates for the missing years in the table, linearly interpolate between the years for which you do know the rates. (For example, the rate in year 4 would be the average of the rate in year 3 and year 5.)
• *c. Calculate the present value of receiving $2300 per year, with certainty, for the next 20 years. Infer rates for the missing years using linear interpolation. (Hint: Use a spreadsheet.)
31
What is the shape of the yield curve given the term structure in Problem 29? What expectations are investors likely to have about future interest rates?
6-2.
Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods):
6
Suppose a 10-year, $1000 bond with an 8% coupon rate and semiannual coupons is trading for a price of $1034.74.
• a. What is the bond’s yield to maturity (expressed as an APR with semiannual compounding)?
• b. If the bond’s yield to maturity changes to 9% APR, what will the bond’s price be?
28
The following table summarizes the yields to maturity on several one-year, zero-coupon securities:
Security Yield (%)
Treasury 3.1
AAA corporate 3.2
BBB corporate 4.2
B corporate 4.9
• a. What is the price (expressed as a percentage of the face value) of a one-year, zero-coupon corporate bond with a AAA rating?
• b. What is the credit spread on AAA-rated corporate bonds?
• c. What is the credit spread on B-rated corporate bonds?
• d. How does the credit spread change with the bond rating? Why?
2
You own three stocks: 600 shares of Apple Computer, 10,000 shares of Cisco Systems, and 5000 shares of Colgate-Palmolive. The current share prices and expected returns of Apple, Cisco, and Colgate-Palmolive are, respectively, $500, $20, $100 and 12%, 10%, 8%.
• a. What are the portfolio weights of the three stocks in your portfolio?
• b. What is the expected return of your portfolio?
• c. Suppose the price of Apple stock goes up by $25, Cisco rises by $5, and Colgate-Palmolive falls by $13. What are the new portfolio weights?
• d. Assuming the stocks’ expected returns remain the same, what is the expected return of the portfolio at the new prices?

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Suppose the term structure of risk-free interest rates is as shown below Answer

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Company HTA had a free cash flow for the firm (FCFF) of $1,500,000 last year Answer

Company HTA had a free cash flow for the firm (FCFF) of $1,500,000 last year Answer

Company HTA had a free cash flow for the firm (FCFF) of $1,500,000 last year Answer

4) Company HTA had a free cash flow for the firm (FCFF) of $1,500,000 last year. It is expected the FCFF will keep a sustainable growth rate of 5%. The company has 2 million common shares outstanding. In addition, the following information has been gathered: Capital structure: D/E=0.2:0.8, Market value of Debt: VD =$5,000,000; Required return on equity: kE =15% Cost of debt before tax =6%, Tax rate: tc =25%; Determine the fair value of HTA stock.

5) Company JUK has a ROE of 25% and the company will not pay any dividend for the next 3 years. It is estimated that the company will pay $2 dividend per share after three years and then to level off to 5% per year forever.
The company has a beta of 2. Assume the risk-free interest rate is 4%, and the market risk premium is 8%.
1. What is your estimate of the fair price of a share of the stock?

2. If the market price of a share is equal to this intrinsic value, what is the P/E ratio?

3. What do you expect its price to be 1 year from now? Is the implied capital gain consistent with your estimate of the dividend yield and the market capitalization rate?

6.MicroSense, Inc., paid $2 dividends per share last year. It is estimated that the company’s ROEs will be 12% and 10%, respectively, next two years. The plowback rate in next two years will be 0.6. It is expected that the dividends will grow at a sustainable rate of 3% per year after two years. Assume that the expected return on the market is 8%, the risk-free rate is 4%, and the beta of the stock is 1.4. What is the fair price of the stock?

7. An analyst uses the constant growth model to evaluate a company with the following data for a company:
Leverage ratio (asset/equity): 1.8
Total asset turnover: 1.5
Current ratio: 1.8
Net profit margin: 8%
Dividend payout ratio: 40%
Earnings per share in the past year: $0.85
The required rate on equity: 15%
Based on an analysis, the growth rate of the company will drop by 25 percent per year in the next two years and then keep it afterward. Assume that the company will keep its dividend policy unchanged.
1. Determine the growth rate of the company for each of next three years.

2. Use the multi-period DDM to estimate the intrinsic value of the company’s stock.

3. Suppose after one year, everything else will be unchanged but the required rate on equity will decrease to 14%. What would be your holding period return for the year?

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Company HTA had a free cash flow for the firm (FCFF) of $1,500,000 last year Answer

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Exercise 16-3 and 17-1 The ledger of Custer Company has the following work in process account Answer

Exercise 16-3 and 17-1 The ledger of Custer Company has the following work in process account Answer

Exercise 16-3 and 17-1 The ledger of Custer Company has the following work in process account Answer

Exercise 16-3
The ledger of Custer Company has the following work in process account.

Work in Process—Painting
5/1 Balance 3910
5/31 Materials 6280
5/31 Labor 3900
5/31 Overhead 1640
5/31 Transferred out ?
5/31 Balance ?

Production records show that there were 600 units in the beginning inventory, 30% complete, 1,580 units started, and 1,430 units transferred out. The beginning work in process had materials cost of $2,210 and conversion costs of $1,700. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

Instructions
(a) How many units are in process at May 31? ( I already found that it’s 750 units)
(b) What is the unit materials cost for May?
(c) What is the unit conversion cost for May?
(d) What is the total cost of units transferred out in May?
(e) What is the cost of the May 31 inventory?

Exercise 17-1
Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations.

Standard Custom
Direct labor costs $48,200 $114,000
Machine hours 1480 1120
Setup hours 110 440

Total estimated overhead costs are $309,500. Overhead cost allocated to the machining activity cost pool is $199,000, and $110,500 is allocated to the machine setup activity cost pool.

Instructions
(a) Compute the overhead rate using the traditional (plant-wide) approach. (% of direct labor cost)
(b) Compute the overhead rates using the activity-based costing approach.

(c) Determine the difference in allocation between the two approaches.

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Exercise 16-3 and 17-1 The ledger of Custer Company has the following work in process account Answer

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On January 2, 20X1, Bruce Greene invested $10,000 in the stock market Answer

On January 2, 20X1, Bruce Greene invested $10,000 in the stock market Answer

On January 2, 20X1, Bruce Greene invested $10,000 in the stock market Answer

1. Basic present value calculations
Calculate the present value of the following cash flows, rounding to the nearest dollar:
a. A single cash inflow of $12,000 in five years, discounted at a 12% rate of return.
b. An annual receipt of $16,000 over the next 12 years, discounted at a 14% rate of return.
c. A single receipt of $15,000 at the end of Year 1 followed by a single receipt of $10,000 at the end of Year 3. The company has a 10% rate of return.
d. An annual receipt of $8,000 for three years followed by a single receipt of $10,000 at the end of Year 4. The company has a 16% rate of return.

2. Cash flow calculations and net present value
On January 2, 20X1, Bruce Greene invested $10,000 in the stock market and purchased 500 shares of Heartland Development, Inc. Heartland paid cash dividends of $2.60 per share in 20X1 and 20X2; the dividend was raised to $3.10 per share in 20X3. On December 31, 20X3, Greene sold his holdings and generated proceeds of $13,000. Greene uses the net-present- value method and desires a 16% return on investments.
a. Prepare a chronological list of the investment’s cash flows. Note: Greene is entitled to the 20X3 dividend.
b. Compute the investment’s net present value, rounding calculations to the nearest dollar.
c. Given the results of part (b), should Greene have acquired the Heartland stock? Briefly explain.

3. Straightforward net present value and internal rate of return
The City of Bedford is studying a 600-acre site on Route 356 for a new landfill. The startup cost has been calculated as follows:
Purchase cost: $450 per acre
Site preparation: $175,000

The site can be used for 20 years before it reaches capacity. Bedford, which shares a facility in Bath Township with other municipalities, estimates that the new location will save $40,000 in annual operating costs.
a. Should the landfill be acquired if Bedford desires an 8% return on its investment? Use the net-present-value method to determine your answer.

4. Straightforward net-present-value and payback computations
STL Entertainment is considering the acquisition of a sight-seeing boat for summer tours along the Mississippi River. The following information is available:

Cost of boat $500,000
Service life 10 summer seasons
Disposal value at the end of 10 seasons $100,000
Capacity per trip 300 passengers
Fixed operating costs per season (including straight-line depreciation) $160,000
Variable operating costs per trip $1,000
Ticket price $5 per passenger

All operating costs, except depreciation, require cash outlays. On the basis of similar operations in other parts of the country, management anticipates that each trip will be sold out and that 120,000 passengers will be carried each season. Ignore income taxes.

Instructions:
By using the net-present-value method, determine whether STL Entertainment should acquire the boat. Assume a 14% desired return on all investments- round calculations to the nearest dollar.

5. Equipment replacement decision
Columbia Enterprises is studying the replacement of some equipment that originally cost $74,000. The equipment is expected to provide six more years of service if $8,700 of major repairs are performed in two years. Annual cash operating costs total $27,200. Columbia can sell the equipment now for $36,000; the estimated residual value in six years is $5,000.
New equipment is available that will reduce annual cash operating costs to $21,000. The equipment costs $103,000, has a service life of six years, and has an estimated residual value of $13,000. Company sales will total $430,000 per year with either the existing or the new equipment. Columbia has a minimum desired return of 12% and depreciates all equipment by the straight-line method.

Instructions:
a. By using the net-present-value method, determine whether Columbia should keep its present equipment or acquire the new equipment. Round all calculations to the nearest dollar, and ignore income taxes.
b. Columbia’s management feels that the time value of money should be considered in all long-term decisions. Briefly discuss the rationale that underlies management’s belief.

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On January 2, 20X1, Bruce Greene invested $10,000 in the stock market Answer

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Problems 10-2A, 10-3A 10-4A_11-3A, 11-4A_12-1A_Accounting book Warren. Reeve. Duchac Answer

Problems 10-2A, 10-3A 10-4A_11-3A, 11-4A_12-1A_Accounting book Warren. Reeve. Duchac Answer

Problems 10-2A, 10-3A 10-4A_11-3A, 11-4A_12-1A_Accounting book Warren. Reeve. Duchac Answer

Problems 10-2A, 10-3A 10-4A_11-3A, 11-4A_12-1A_Accounting book Warren. Reeve. Duchac Answer

Accounting (Warren. Reeve. Duchac) 25th edition as follows:
Problems 10-2A, 10-3A 10-4A from Chapter 10 (Fixed Assets and Intangible Assets) all on Page 485.
Problems 11-3A, 11-4A from Chapter 11 (Current Liabilities and Payroll) on pages 527 and 528.
Problem 12-1A from Chapter 12 (Accounting for Partnerships and Limited Liability Companies) on page 571/572.

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Problems 10-2A, 10-3A 10-4A_11-3A, 11-4A_12-1A_Accounting book Warren. Reeve. Duchac

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FIN 515 Managerial Finance Week 5 Risk, Return, and the Capital Asset Pricing Model Quiz Answer

FIN 515 Managerial Finance Week 5 Risk, Return, and the Capital Asset Pricing Model Quiz Answer

FIN 515 Managerial Finance Week 5 Risk, Return, and the Capital Asset Pricing Model Quiz Answer

Week 5 Risk, Return, and the Capital Asset Pricing Model Quiz

Question 1. Which of the following statements is correct?
If a project with normal cash flows has an IRR greater than the WACC, the project must also have a positive NPV.
If Project A’s IRR exceeds Project B’s, then A must have the higher NPV.
A project’s MIRR can never exceed its IRR.
If a project with normal cash flows has an IRR less than the WACC, the project must have a positive NPV.
If the NPV is negative, the IRR must also be negative

Question 2. (TCO C) Company A has a beta of 2.77. Company B has a beta of .73. Company C has a beta of .90. The risk free rate is 6% and the market risk premium is 4%. What is the expected return of investing in Company B?

Question 3. Your stock portfolio consists of only two stocks. You have $30,000 in Company A and $35,000 in Company B. Company A has an actual return of -8% and Company B has a return of 12%. What is the return on your portfolio?

Question 4.
Division Asset Beta Next Period’s Expected Free Cash
Flow ($mm) Expected Growth Rate
Oil Exploration 1.4 450 4.0%
Oil Refining 1.1 525 2.5%
Gas and Convenience Stores 0.8 600 3.0%
The risk-free rate of interest is 3% and the market risk premium is 5%.

Which is the cost of capital for the oil exploration division closest to?
A) 6.0%
B) 7.0%
C) 8.5%
D) 10.0%

Question 5. (TCO E) A company has a capital structure of 40% debt and 60% equity. The YTM on the company’s bonds is 9%, and the company’s effective tax rate is 40%. The CFO has estimated the company’s WACC to be 9.96%. What is the company’s cost of equity?

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FIN 515 Managerial Finance Week 5 Risk, Return, and the Capital Asset Pricing Model Quiz  Answer

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ACC 101 Unadjusted trial balance sheet Data P06-Practice Set_Adventure Travel General Journal Answer

ACC 101 Unadjusted trial balance sheet Data P06-Practice Set_Adventure Travel General Journal Answer

ACC 101 Unadjusted trial balance sheet Data P06-Practice Set_Adventure Travel General Journal Answer

Given Data P06-Practice Set:

ADVENTURE TRAVEL

Apr 1 Nozomi invested cash $30,000
1 Nozomi invested computer equipment $20,000
2 Paid first month’s rent $1,800
3 Purchased office supplies $1,000
10 Paid annual insurance premium $2,400
14 Paid salaries $1,600
24 Collected commissions earned $8,000
26 Paid salaries $1,600
27 Paid for computer repair $350
27 Paid telephone bill $750
28 Nozomi withdrew cash for personal use $1,500

Chart of Accounts
101 Cash
106 Accounts Receivable
124 Office Supplies
128 Prepaid Insurance
167 Computer Equipment
168 Accumulated Depreciation, Computer Equipment
209 Salaries Payable
301 J. Nozomi, Capital
302 J. Nozomi, Withdrawals
405 Commissions Earned
612 Depreciation, Computer Equipment
622 Salaries Expense
637 Insurance Expense
640 Rent Expense
650 Office Supplies Expense
684 Repairs Expense
688 Telephone Expense
901 Income Summary

Additional information for adjusting entries:
Apr 30 2/3 of a month’s insurance expired
Office supplies on hand $600
Depreciation on computer $500
Unpaid salaries $420

Check figures:
(3) Unadjusted trial balance totals $58,000
(4a) Debit Insurance Expense $133
(5) Net income $447
Capital (4/30/2010) $48,947
Total assets $49,367
(7) Post-closing trial balance totals $49,867

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Robert Landau is considering three job offers Answer

Robert Landau is considering three job offers Answer

Robert Landau is considering three job offers Answer

Robert Landau is considering three job offers. In trying to decide which to accept, Robert has concluded that three objectives are important in this decision. First, of course, is to maximize disposable income—the amount left after paying for housing, utilities, taxes, and other necessities. Second, Robert likes cold weather and enjoys winter sports. The third objective relates to the quality of the community. Being single, Robert would like to live in a city with a lot of activities and a large population of single professionals.
Robert has done his homework on the locations of the three job offers. He has determined the type of apartment he could get, determining disposable income. He has decided to use annual snowfall to determine the value of his second objective. For his third objective, Robert found a recent magazine survey of large cities that scores those cities as places for single professionals to live. Although the survey isn’t perfect from Robert’s point of view, all three of the cities where he has offers are included in the survey. The disposal income objective is most important, twice as important as each of the other two criteria. The second and third criteria are equally important.
Here is a summary of each of the locations:
1) ZDR Technology in Kingman, AZ: Disposable income estimate: $1,600/month; snowfall average: 320 cm; magazine score: 50.
2) Minne Digital in Minneapolis, MN: Disposable income estimate: $1,300 to 1500/month; snowfall average 400 cm; magazine score: 75.
3) Wharf Consulting in San Francisco, CA: Disposable income estimate: $1,200/month; snowfall average: negligible; magazine score: 95.

(a) What is Robert’s problem or opportunity in this situation?
(b) What is the overall objective for Robert’s decision? What are the fundamental objectives that support the overall objective?
(c) What are Robert’s alternatives for this decision situation?
(d) Evaluate this decision situation using tradeoffs or a weighted scoring model. Based on that analysis, to which location should Robin select?

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Robert Landau is considering three job offers Answer