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1. FIN 370T Assignment Week 1 Apply Exercise(All Possible Questions/Answers) For more classes visit www.snaptutorial.com FIN 370T ASSIGNMENT Week 1 Apply: Week 1 Exercise Review the Week 1 “Knowledge Check” in Connect® in preparation for this Assignment . Complete the Week 1 “Exercise” in Connect®. Note: You have only one attempt available to complete this Assignment . Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date. Materials Learn: McGraw-Hill Connect® Access Maximizing owners’ equity value means carefully considering all of the following EXCEPT Multiple Choice how best to return the profits from those projects to the owners over time.

2. which projects to invest in. how to best bring additional funds into the firm. how best to increase the firm’s risk. Not all cash a company generates will be returned to the investors. Which of the following will NOT reduce the amount of capital returned to the investors? Multiple Choice taxes dividends retained earnings

3. As individual legal entities, corporations assume liability for their own debts, so the shareholders hold Multiple Choice unlimited liability. shared liability. joint liability. only limited liability. For corporations, maximizing the value of owner’s equity can also be stated as Multiple Choice maximizing the stock price. maximizing earnings per share. maximizing retained earnings. maximizing net income.

4. Which of the following is not an impact of the slowdown occurring in China’s economy? Multiple Choice falling community prices lower demand in materials such as steel, iron ore, and copper real estate market declining in Sydney, Australia money going out of Manhattan, New York What is the debt ratio for a firm with an equity multiplier of 3.5? Multiple Choice 58.51 percent 66.25 percent 44.09 percent

5. 71.43 percent Which of the following refer to ratios that measure the relationship between a firm’s liquid (or current) assets and its current liabilities? Multiple Choice internal-growth market value liquidity cross-section For publicly traded firms, which of these ratios measure what investors think of the company’s future performance and risk? Multiple Choice profitability ratios

6. liquidity ratios price value ratios market value ratios Which of the following is the maximum growth rate that can be achieved by financing asset growth with new debt and retained earnings? Multiple Choice sustainable growth rate weighted growth rate internal growth rate retained earnings growth rate

7. To interpret financial ratios, managers, analysts, and investors use which of the following type of benchmarks? Multiple Choice time series analysis time-industry analysis competitive analysis cross-industry analysis ********************************************** FIN 370T Assignment Week 1 Apply: Finance and Financial Statement Analysis Homework(All Possible Questions/Answers) For more classes visit www.snaptutorial.com FIN 370T ASSIGNMENT Week 1 Apply: Finance and Financial Statement Analysis Homework

8. Review the Week 1 “Practice: Finance and Financial Statement Analysis Quiz” in Connect®. Complete the Week 1 “Apply: Finance and Financial Statement Analysis Homework” in Connect®. Note: You have only one attempt available to complete this Assignment . Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date. Which of the following is the firm’s highest-level financial manager? Multiple Choice • chief executive officer • corporate governance • chief financial officer • board of directors

9. Which of these must effectively distribute capital between investors and companies? Multiple Choice • companies • individuals • international investors • financial institutions Which of the following statements is correct? Multiple Choice

10. • Financial managers double-check the accountant’s statements. • Accountants are focused on what happened in the past. • Both accountants and financial managers use total quality management systems to standardize data. • Financial managers are focused on what happened in the past. This is a general term for securities like stocks, bonds, and other assets that represent ownership in a cash flow. Multiple Choice • investment •

11. real asset • financial asset • financial markets The portion of a company’s profits that are kept by the company rather than distributed to the stockholders as cash dividends is referred to as Multiple Choice • institutional investment. • restricted earnings. • venture capital.

12. • retained earnings. A potential future negative impact to value and/or cash flows is often discussed in terms of probability of loss and the expected magnitude of the loss. This is called Multiple Choice • risk. • options. • standard deviation. • coefficient of variation.

13. Which of the following is defined as a group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations? Multiple Choice • market instruments • financial markets • asset classes • investments What is the difference in perspective between finance and accounting?

14. Multiple Choice • ownership • timing • liability • risk This subarea of finance is important for adapting to the global economy. Multiple Choice • financial management •

15. financial institutions and markets • investments • international finance For corporations, maximizing the value of owner’s equity can also be stated as Multiple Choice • maximizing net income. • maximizing retained earnings. • maximizing the stock price.

16. • maximizing earnings per share. Which of the following is NOT a function of the board of directors? Multiple Choice • evaluate the CEO • design compensation contracts for the CEO • provide reports to the auditors • hire the CEO

17. This is the set of laws, policies, incentives, and monitors designed to handle the issues arising from the separation of ownership and control. Multiple Choice • corporate governance • defined benefit plan • invisible hand • agency theory

18. Which of the following statements is incorrect? Multiple Choice • Most sole proprietors raise money by borrowing from banks. • S corporations are considered a hybrid organization. • An advantage of sole proprietorships is that the owner has complete control. • Partnerships have unlimited liability. Agency problems exist in which forms of business ownership? Multiple Choice • partnership

19. • sole proprietorship • corporation • S corporation An angel investor differs from a venture capitalist because of the Multiple Choice • investment time frame. • voting rights. • type of investment. •

20. size of investment. Which statement is incorrect regarding hybrid organizations? Multiple Choice • They offer single taxation. • They offer limited risk to the owners. • They offer the same type of control as a sole proprietorship. • All of these choices are correct.

21. From a taxation perspective, the form of business organization with the highest business level taxes is the Multiple Choice • S corporation. • corporation. • sole proprietorship. • partnership. Corporate stakeholders include all of the following EXCEPT

22. Multiple Choice • employees. • suppliers. • shareholders. • auditors. From the perspective of ownership risk, the best form of business organization is the Multiple Choice • sole proprietorship. •

23. partnership. • corporation. • S corporation. Which of the following is NOT considered a hybrid organization? Multiple Choice • all of these choices are correct. • limited partnership • S corporation • limited liability company

24. • limited liability partnership Which of these is the system of incentives and monitors that tries to overcome the agency problem? Multiple Choice • corporate Governance • checks and Balances • Security Exchange Commission • board of Directors

25. When determining a form of business organization, all of the following are considered EXCEPT Multiple Choice • the physical location of the business. • who owns the firm. • the tax ramifications. • the owners’ risks. All of the following are an example of a fiduciary relationship EXCEPT

26. Multiple Choice • a financial advisor advises her clients. • the shareholder elects a board member. • a bank employee manages deposits. • a CEO manages the firm. Restricted stock is Multiple Choice • a special type of stock that can be converted into corporate bonds after a specific amount of time has elapsed. •

27. a special type of stock that is not transferable from the current holder to others until specific conditions are satisfied. • a special type of stock that is a result of offering an employee stock ownership plan. Which of the following refer to ratios that measure the relationship between a firm’s liquid (or current) assets and its current liabilities? Multiple Choice • liquidity • internal-growth • cross-section •

28. market value Which of the following measures the number of days accounts receivable are held before the firm collects cash from the sale? Multiple Choice • accounts receivable turnover • average payment period • accounts payable turnover • average collection period

29. Which ratio measures the number of dollars of operating earnings available to meet the firm’s interest dollars and other fixed charges? Multiple Choice • fixed-charge coverage ratio • basic earning power • times interest earned • ROA Which ratio measures the operating return on the firm’s assets irrespective of financial leverage and taxes? Multiple Choice •

30. profit margin • basic earning power ratio • operating leverage return • return on assets A firm has EBIT of $1,000,000 and depreciation expense of $400,000. Fixed charges total $600,000. Interest expense totals $70,000. What is the firm’s fixed-charge coverage ratio? Multiple Choice • 2.45 times • 1.67 times •

31. 1.00 times • 2.33 times Which of these ratios measure the extent to which the firm uses debt (or financial leverage) versus equity to finance its assets? Multiple Choice • debt management ratios • financial ratios • liquidity ratios • equity ratios

32. A strong liquidity position means that Multiple Choice • the firm is able to meet its short-term obligations. • the firm pays out a large portion of its net income in the form of dividends. • the firm uses little debt in its capital structure. • the firm pays its creditors on time. Which type of ratio measures the dollars of current assets available to pay each dollar of current liabilities?

33. rev: 08_14_2018_QC_CS-133354 Multiple Choice • internal-growth • current • cross-section • quick or acid-test A firm has EBIT of $300,000 and depreciation expense of $12,000. Fixed charges total $44,000. Interest expense totals $7,000. What is the firm’s cash coverage ratio? Multiple Choice • 7.09 times

34. • 3.76 times • 7.25 times • 4.91 times Incorrect Which of the following measures the number of dollars of sales produced per dollar of fixed assets? Multiple Choice • fixed asset to working capital ratio • fixed asset management ratio •

35. sales to working capital ratio • fixed asset turnover ratio The term “capital structure” refers to Multiple Choice • the amount of current versus fixed assets on the balance sheet. • the amount of long-term debt versus equity on the balance sheet. • the amount of current versus long-term debt on the balance sheet.

36. A firm reported year-end cost of goods sold of $10 million. It listed $2 million of inventory on its balance sheet. Using a 365-day year, how many days did the firm’s inventory stay on the premises? Multiple Choice • 73 days • 2 days • 20 days • 18.25 days Tops N Bottoms Corp. reported sales for 2018 of $50 million. Tops N Bottoms listed $4 million of inventory on its balance sheet. Using a 365- day year, how many days did Tops N Bottoms’ inventory stay on the premises? How many times per year did Tops N Bottoms’ inventory turn over?

37. Multiple Choice • 29.2 days, 0.0345 times, respectively • 29.2 days, 12.5 times, respectively • 0.08 days, 12.5 times, respectively • 12.5 days, 29.2 times, respectively Which ratio measures how many days inventory is held before the final product is sold? Multiple Choice

38. • total asset turnover • inventory turnover • days’ sales in inventory • inventory intensity ratio Which ratio measures the number of dollars of operating earnings available to meet each dollar of interest obligations on the firm’s debt? Multiple Choice • times interest earned •

39. ROA • cash coverage ratio • fixed-charge coverage ratio You are considering a stock investment in one of two firms (LotsofDebt, Inc. and LotsofEquity, Inc.), both of which operate in the same industry. LotsofDebt, Inc. finances its $100 million in assets with $90 million in debt and $10 million in equity. LotsofEquity, Inc. finances its $100 million in assets with $10 million in debt and $90 million in equity. What are the debt ratio, equity multiplier, and debt-to-equity ratio for the two firms? Multiple Choice • LotsofDebt: 90 percent, 10 times, 9 times, respectively; and LotsofEquity: 10 percent, 1.11 times, 0.1111 times, respectively •

40. LotsofDebt: 10 percent, 1.11 times, 0.1111 times, respectively; and LotsofEquity: 90 percent, 10 times, 9 times, respectively • LotsofDebt: 90 percent, 1.11 times, 0.1111 times, respectively; and LotsofEquity: 10 percent, 10 times, 9 times, respectively • LotsofDebt: 10 percent, 10 times, 9 times, respectively; and LotsofEquity: 90 percent, 1.11 times, 0.1111 times, respectively A firm has an ACP of 38 days and its annual sales are $5.3 million. What is its account receivable balance? Multiple Choice • $759,021 • $619,304 •

41. $551,781 • $692,098 Tina’s Track Supply’s market-to-book ratio is currently 4.5 times and PE ratio is 10.5 times. If Tina’s Track Supply’s common stock is currently selling at $100 per share, what is the book value per share and earnings per share? Multiple Choice • $9.5238, $22.2222, respectively • $1,050, $450, respectively • $450, $1,050, respectively •

42. $22.2222, $9.5238, respectively Bree’s Tennis Supply’s market-to-book ratio is currently 9.4 times and PE ratio is 20 times. If Bree’s Tennis Supply’s common stock is currently selling at $20.50 per share, what is the book value per share and earnings per share? Multiple Choice • $192.70, $410.00, respectively • $1.025, $2.1809, respectively • $410.00, $192.70, respectively • $2.1809, $1.025, respectively

43. An investor wanting large returns will be interested in companies that have Multiple Choice • high current ratios. • high times interest earned. • high ROEs. • high ROAs.

44. Which of the following measures the operating return on the firm’s assets, irrespective of financial leverage and taxes? Multiple Choice • return on equity • basic earnings power ratio • return on assets • profit margin For publicly traded firms, which of these ratios measure what investors think of the company’s future performance and risk? Multiple Choice •

45. liquidity ratios • profitability ratios • market value ratios • price value ratios According to the list provided in the textbook, which of the following is NOT one of the cautions in using ratios to evaluate firm performance? rev: 07_10_2017_QC_CS-93252 Multiple Choice • The firm has different accounting procedures. •

46. The firm has seasonal cash flow differences. • The firm had a one-time event. • The firm has a different capital structure. To interpret financial ratios, managers, analysts, and investors use which of the following type of benchmarks? Multiple Choice • competitive analysis • time series analysis • cross-industry analysis

47. • time-industry analysis Last year Mocha Java, Inc. had an ROA of 10 percent, a profit margin of 5 percent, and sales of $25 million. What is Mocha Java’s total assets? Multiple Choice • $0.125m. • $1.25m. • $12.5m. • $12m.

48. Last year Rain Repel Corporation had an ROE of 10 percent and a dividend payout ratio of 80 percent. What is the sustainable growth rate? Multiple Choice • 50.00 percent • 2.04 percent 44.44 percent 1.11 percent ********************************************** FIN 370T Assignment Week 1 Practice: Finance and Financial Statement Analysis Quiz(All Possible Questions/Answers)

49. For more classes visit www.snaptutorial.com FIN 370T ASSIGNMENT Week 1 Practice: Finance and Financial Statement Analysis Quiz Complete the Week 1 “Practice: Finance and Financial Statement Analysis Quiz” in Connect®. Note: You have unlimited attempts available to complete practice Assignment s. The highest scored attempt will be recorded. These Assignment s have earlier due dates, so plan accordingly. Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date. Which of the following is the firm’s highest-level financial manager? Multiple Choice chief executive officer corporate governance chief financial officer board of directors

50. Which of these must effectively distribute capital between investors and companies? Multiple Choice companies individuals international investors financial institutions Which of the following statements is correct? Multiple Choice Financial managers double-check the accountant’s statements. Accountants are focused on what happened in the past.