B301 Finance

Calculate a company's Net Cash Flow From Customers for the past year (as part of figuring its Cash Flow From Operating Activities) using the following data: Net Sales $1 million; Beginning Accounts Receivable $50,000; Ending Accounts Receivable $25,000. $1,075,000 $1,025,000 $950,000 $925,000

$1,025,000

How much money can you borrow if you can afford a payment of $800 per month for 30 years at 7% interest? $120,246.00 $975,976.00 $288,000.00 $155,255.00

$120,246.00

You just wrote a children's book titled "Henry Putter and the Sorcerer's Stamp." The book has been very successful. You are scheduled to receive a royalty payment of $5,000 three years from today. A local investor offers to buy the rights to the future royalty from you today. Assuming you wish to earn 10% on your money, how much should you charge the investor TODAY so that he can take over the rights to the book? $3,756.00 $6,655.00 $4,877.00 $4,121.00

$3,756.00

You receive a royalty payment on a book you wrote. The payment is equal to $5,000 per year and is forecast to continue for 10 years. At a 9% discount rate, how much is this stream of payments worth today? $32,088.00 $50,000.00 $75,964.00 $22,350.00

$32,088.00

Bob invests $150,000 today. He believes he will earn a 9% return on his investment. How much will the investment be worth exactly 10 years from now? (Don't worry about rounding, select the answer closest to the correct one.) $355,104.00 $63,361.00 $161, 637.00 $139, 200.00

$355,104.00

In order to have $1 million 30 years from now when you retire (assuming 11% annual return), how much do you need to invest per MONTH (assume monthly compounding)? $356.00 $9,523.00 $29,111.00 $5,024.00

$356.00

Calculate the Gross Profit for a company which has $1 million in Sales; $640,000 in Cost of Goods Sold; Sales/General/Administrative (SG&A) expenses of $150,000; Interest expense of $50,000; and Taxes of $75,000. $85,000 $210,000 $360,000 $160,000

$360,000

Calculate the EBIT of a company which has $1 million in Sales; $450,000 in Cost of Goods Sold; Selling Expenses of $75,000; General and Administrative Expenses of $100,000; Interest Expense of $100,000; and Taxes of $100,000. $275,000 $550,000 $375,000 $175,000

$375,000

You invested $100 in a collectible baseball player card 15 years ago. Today, the card is worth $1,000. What rate of return did you earn on your investment? 16.59% 11.25% 17.88% There is no solution to this problem

16.59%

Which of these items is most likely to appear on a balance sheet? Earnings per Share Cost of Goods Sold Operating Profit Accounts Payable

Accounts Payable

Which method of accounting requires that a company record financial transactions (sales, expenses) when they are incurred, regardless of when cash changes hands? Cash Method FIFO Method Deferral Method Accrual Method

Accrual Method

Cash Flow statements are generally organized into major sections. Which of the following is usually NOT one of these sections? Cash Flow From Lending Activities Cash Flow from Financing Activities Cash Flow From Operating Activities Cash Flow From Investing Activities

Cash Flow From Lending Activities

Based solely on the information provided here, which company likely has the highest amount of owners equity?: Company W: Total Assets $1 million; Total Liabilities $600,000 Company X: Total Assets $600,000; Total Liabilities $100,000 Company Y: Total Assets $8.6 million; Total Liabilities $8.4 million Company Z: Total Assets $300,000; Total Liabilities $25,000

Company X

Which of the following represents items that are usually converted to cash within a year? Long-term bonds Current assets Goodwill Long-term bonds

Current assets

The rules governing the format and construction of financial statements of publicly traded companies are found among the standards issued by which governing body? Securities Exchange Commission (SEC) Internal Revenue Service (IRS) Financial Accounting Standards Board (FASB) Standard and Poor's (S&P)

Financial Accounting Standards Board (FASB)

If a company borrows 1,000 in long-term debt (liabilities), which of the following must be true? Current assets decreased by 1,000. Long-term liabilities decreased by 1,000. Long-term liabilities increased by 1,000. Current liabilities increased by 1,000.

Long-term liabilities increased by 1,000.

The regulatory body that publishes publicly-traded companies' official financial statements is known as the: Internal Revenue Service (IRS) Securities Exchange Commission (SEC) Accounting Standards Board (ASB) New York Stock Exchange (NYSE)

Securities Exchange Commission (SEC)

Calculate a company's Current Assets based on the following data from its Balance Sheet: Cash $100,000; Accounts Receivable $18,000; Equipment $75,000; Property $90,000; Inventory $50,000. $118,000 $168,000 $333,000 $243,000

$168,000

You can afford to pay $500 per month for a car loan. You plan to borrow for 5 years at 9% interest. How much can you borrow for your new car? $24,086.00 $30,000.00 $37,712.00 $28,250.00

$24,086.00

Calculate the Earnings Before Tax (EBT) of a company which has $2 million in Sales; Cost of Goods Sold of $1 million; Selling Expenses of $200,000; General and Administrative Expenses of $250,000; Interest Expense of $100,000; and Taxes of $125,000. $450,000 $325,000 $550,000 $1 million

$450,000

You have been promised by your grandfather that you will receive an inheritance of $100,000 10 years from today. He is offering you the chance to inherit a lower amount of money NOW. If you believe that your interest rate should be 8%, how much do you believe you should receive now? $46,319.00 $93,571.00 $215,892.00 $91,122.00

$46,319.00

You invest $5,000 per year for 10 years, earning 8%. What is the Future Value? $72,432.00 $51,526.00 $10,794.00 $33,550.00

$72,432.00

If you wish to have $1,000,000 30 years from today and you can earn 9% interest, how much do you need to invest TODAY in order to have the million dollars? $75,371.00 $100,341.00 $799,186.00 $13,267,6778.00

$75,371.00

Calculate a company's Total Liabilities based on the following data from its Balance Sheet: Cash $250,000; Accounts Payable $100,000; Inventory $75,000; Notes Payable $300,000; Long-Term Debt $500,000; Accounts Receivable $150,000. $900,000 $1,150,000 $800,000 $1,225,000

$900,000

How much money will you have if you invest $500 per MONTH for 25 years, earning a 12% annual rate of return? $939,423.00 $14,121.00 $46,759.00 $756,890.00

$939,423.00

You need to have $50,000 20 years from now. You will earn 9%. How much do you need to save per YEAR, in order to have the $50,000 in 20 years? $977.00 $5,477.00 $74.00 $2,500.00

$977.00

If you invest $5,000 today and in 10 years the investment is worth $15,000, what rate of interest did you earn? 11.61% 139.35% 13.11% There is no solution to this problem

11.61%

If you invest $1,000,000 today, how long will it take the money to become worth $5,000,000 if you earn 11% on your investments? 15.42 years 13.22 years 16.80 years There is no solution to this problem

15.42 years

For the following, calculate the company's net income (EAT) (use only what data you need): Sales = 2,000. Income tax rate = 50%. COGS = 10% of sales. SG&A expense = 100. Interest expense = 50. Dividend payout ratio = 25%. 309.37 412.50 825.00 850.00

825.00

On a Balance Sheet, Inventory is generally categorized as a __________ Equipment Long-Term Asset Notes Payable Current Asset

Current Asset

Salaries of a company's Chief Executive Officer (CEO) would fall under which category of expense on an Income Statement? General and Administrative Expenses Other Operating Expenses Cost of Goods Sold Interest Expense

General and Administrative Expenses

Which method of calculating Cash Flows of a company involves making adjustments to the company's Net Income? Net Income Method Direct Method Indirect Method Uneven Cash Flows Method

Indirect Method

Investments in which of the following would impact cash flow from investing activities on a Cash Flow Statement? Intangible Assets, Equipment, Buildings, Ownership in Other Companies Inventory, Dividends, Buildings, Ownership in Other Companies Sales, COGS, Income Tax, Net Income (EAT) Accounts Receivable, Inventory, Equipment, Land

Intangible Assets, Equipment, Buildings, Ownership in Other Companies

Information found on any one of the major financial statements Is often linked in some way to the other financial statements. Comes exclusively (only) from one of the other major financial statements. Is provided to a company by the IRS. Is almost always untrue and should be viewed with suspicion.

Is often linked in some way to the other financial statements.

A Balance Sheet is a statement of a Company's ____________ Net Worth Earnings Owner's Equity over a period of time (i.e. quarterly or annual) Cash Flow

Net Worth

Another name for the Income Statement is Balance Sheet Statement of Assets Cash Flow Statement Profit and Loss (P&L) Statement

Profit and Loss (P&L) Statement

An income statement is analogous to a company's________. Accounts Receivable Statement Profit and Loss Statement Net Worth Statement Tax Statement

Profit and Loss Statement

Assume your company has purchased part ownership (shares) in one of its supplier companies. If the supplier company earns a profit and delivers $100,000 of that profit to your company as its portion of the earnings, under what category on the income statement should the $100,000 be recorded? Sales Profit from Investments Earnings Before Taxes (EBT) Other Operating Income

Profit from Investments

Which of the following is true of publicly-traded corporations in the U.S.? Every publicly-traded corporation must file financial statements with the IRS. The IRS may choose to publish these financial statements, at its own discretion. They are required by law to provide financial statements to the public (via the government) on a regular basis. Publicly-traded companies must provide summary financial statements on-demand to individual investors who ask for them, but are not require to file the statements for public use. Publicly-traded corporations are not required to provide financial statements to the public.

They are required by law to provide financial statements to the public (via the government) on a regular basis.