Finance 3312 Quiz 1 Study Set

Your firm has net income of $301 on total sales of $1,220. Costs are $680 and depreciation is $110. The tax rate is 23 percent. The firm does not have interest expenses. What is the operating cash flow?

$441

Rottweiler Obedience School's December 31, 2021, balance sheet showed net fixed assets of $1,740,000, and the December 31, 2022, balance sheet showed net fixed assets of $2,070,000. The company's 2022 income statement showed a depreciation expense of $324,000. What was the company's net capital spending for 2022?

Net capital spending=$664,000

Nataro, Incorporated, has sales of $642,000, costs of $330,000, depreciation expense of $75,000, interest expense of $40,000, and a tax rate of 22 percent. What is the net income for this firm?

Net income=$153,660

The goal of financial management is to increase the: -future value of the firm's total equity -book value of equity -dividends paid per share -number of shares outstanding

current market value per share

The primary goal of financial management is most associated with increasing the: -dollar amount of each sale -traffic flow within the firm's stores -fixed costs while lowering the variable costs -firm's liquidity -market value of the firm

market value of the firm

The issuer of a security must be involved in all _____ transactions involving that security. exchange-listed -secondary market -over-the-counter -dealer market -primary market

primary market

An agency issue is most apt to develop when: -a firm encounters a period of stagnant growth. -a firm downsizes. -the control of a firm is separated from the firm's ownership. -the firm's owner is also its key manager. -a firm is structured as a general partnership.

the control of a firm is separated from the firm's ownership

The primary goal of financial management is to maximize: -current profits -market share -current dividends -the market value of existing stock -revenue growth

the market value of existing stock

Nataro, Incorporated, has sales of $638,000, costs of $329,000, depreciation expense of $74,000, interest expense of $39,000, and a tax rate of 21 percent. The firm paid out $69,000 in cash dividends. What is the addition to retained earnings?

Addition to retained earnings=$85,840

The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict? -Organizational -Structural -Formative -Agency -Territorial

Agency

The December 31, 2021, balance sheet of Justin's Golf Shop, Incorporated, showed current assets of $1,015 and current liabilities of $870. The December 31, 2022, balance sheet showed current assets of $1,230 and current liabilities of $905. What was the company's 2022 change in net working capital, or NWC?

Change in net working capital=$180

Which one of the following is most apt to align management's priorities with shareholders' interests? -Holding corporate and shareholder meetings at high-end resort-type locations preferred by managers -Compensating managers with shares of stock that must be held for a minimum of three years -Paying a special management bonus on every fifth year of employment -Increasing the number of paid holidays that long-term employees are entitled to receive -Allowing employees to retire early with full retirement benefits

Compensating managers with shares of stock that must be held for a minimum of three years

You are given the following information for Troiano Pizza Company: sales = $71,200; costs = $52,900; addition to retained earnings = $5,100; dividends paid = $2,600; interest expense = $2,310; tax rate = 23 percent. Calculate the depreciation expense for the company.

Depreciation expense=$5,990

Nataro, Incorporated, has sales of $666,000, costs of $336,000, depreciation expense of $81,000, interest expense of $46,000, and a tax rate of 23 percent. The firm paid out $76,000 in cash dividends and has 36,600 shares of common stock outstanding. -What is the earnings per share, or EPS, figure? -What is the dividends per share figure?

Earning per share=$4.27 Dividends per share=$2.08

Graff, Incorporated, has sales of $40,980, costs of $13,380, depreciation expense of $2,830, and interest expense of $2,060. The tax rate is 22 percent. What is the operating cash flow, or OCF?

Operating cash flow=$22,604

Bing, Incorporated, has current assets of $2,190, net fixed assets of $9,500, current liabilities of $1,360, and long-term debt of $4,000. -What is the value of the shareholders' equity account for this firm? -How much is net working capital?

Shareholders' equity=$6,330 Net working capital=$830

The shareholders of Qiang's Markets would benefit if the firm were to be acquired by Better Foods. However, Weil's board of directors rejects the acquisition offer. This is an example of: -a corporate takeover -a capital structure issue -a working capital decision -an agency conflict -a compensation issue

an agency conflict

Probably the least effective means of aligning management goals with shareholder interests is: -the potential for a proxy fight by an unhappy segment of shareholders. -basing all management bonuses on performance goals. -holding management salaries steady while increasing stock option grants. -the threat of a takeover of the firm. -automatically increasing management salaries on an annual basis.

automatically increasing management salaries on an annual basis

Which one of the following situations is most apt to create an agency conflict? -compensating a manager based on his or her division's net income -giving all employees a bonus if a certain level of efficiency is maintained -hiring an independent consultant to study the operating efficiency of the firm -basing management bonuses on the length of employment -laying off employees during a slack period

basing management bonuses on the length of employment

One example of a primary market transaction would be the: -sale of 100 shares of stock by Maria to her best friend. -purchase by Theo of 5,000 shares of stock from his father. -sale of 1,000 shares of newly issued stock by Alt Company to Miquel. -sale by Terry of 50,000 shares of stock to his brother. -sale of 5,000 shares of stock owned by a corporate CEO to his son.

sale of 1,000 shares of newly issued stock by Alt Company to Miquel.

You contacted your stock broker this morning and placed an order to sell 300 shares of a stock that trades on the NYSE. This sale will occur in the: -dealer market. -over-the-counter market. -secondary market. -primary market. -tertiary market.

secondary market