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FNCE 3001 - Exam - Week 6 practice questions solution latest solution 2020 (96 out of 100) Walden University

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FNCE 3001 - Exam - Week 6 practice questions solution latest solution 2020 (96 out of 100) Walden University • Question 1 4 out of 4 points Which one of the following provides compensat... ion to a bondholder when a bond is not readily marketable at its full value? • Question 2 4 out of 4 points Both Projects A and B are acceptable as independent projects. However, the selection of either one of these projects eliminates the option of selecting the other project. Which one of the following terms best describes the relationship between Project A and Project B? • Question 3 4 out of 4 points Red Mountain, Inc. bonds have a face value of $1,000. The bonds carry a 7 percent coupon, pay interest semiannually, and mature in 13.5 years. What is the current price of these bonds if the yield to maturity is 6.82 percent? • Question 4 4 out of 4 points A $1,000 face value bond is currently quoted at 101.2. The bond pays semiannual payments of $28.50 each and matures in six years. What is the coupon rate? • Question 5 4 out of 4 points A call provision grants the bond issuer the: • Question 6 4 out of 4 points Miller Farm Products is issuing a 15-year, unsecured bond. Based on this information, you know that this debt can be described as a: • Question 7 4 out of 4 points Weston Steel purchased a new coal furnace six years ago at a cost of $2.2 million. Last year, the government changed the emission requirements and this furnace cannot meet those standards. Thus, Weston can no longer use the furnace, nor has it been able to locate anyone willing to purchase the furnace. Given the current situation, the furnace is best described as which type of cost? • Question 8 4 out of 4 points A pro forma financial statement is a financial statement that: • Question 9 4 out of 4 points Mary owns 100 shares of stock. Each share entitles her to one vote per open seat on the board of directors. Assume there are three open seats in the current election and Mary casts all 300 of her votes for a single candidate. What is the term used to describe this type of voting? • Question 10 4 out of 4 points An all-equity firm has net income of $28,300, depreciation of $7,500, and taxes of $2,050. What is the firm's operating cash flow? • Question 11 4 out of 4 points Which one of the following best describes an arithmetic average return? • Question 12 4 out of 4 points Reynolds Metals common stock is selling for $25 a share and has a dividend yield of 3.1 percent. What is the dividend amount? • Question 13 4 out of 4 points Mike's Fish Market is implementing a project that will initially increase accounts payable by $4,600, increase inventory by $4,800, and decrease accounts receivable by $800. All net working capital will be recouped when the project terminates. What is the cash flow related to the net working capital for the last year of the project? • Question 14 4 out of 4 points Which one of the following statements is true? • Question 15 4 out of 4 points The Greasy Spoon Restaurant is considering a project with an initial cost of $525,000. The project will not produce any cash flows for the first three years. Starting in year 4, the project will produce cash inflows of $721,000 a year for three years. This project is risky, so the firm has assigned it a discount rate of 16 percent. What is the project's net present value? • Question 16 4 out of 4 points One year ago, LaTresa purchased 600 shares of Outland Co. stock for $3,600. The stock does not pay any regular dividends but it did pay a special dividend of $0.30 a share last week. This morning, she sold her shares for $7.25 a share. What was the total return on this investment? • Question 17 0 out of 4 points Your portfolio has provided you with returns of 8.6 percent, 14.2 percent, -3.7 percent, and 12.0 percent over the past four years, respectively. What is the geometric average return for this period? • Question 18 4 out of 4 points A project has the following cash flows. What is the payback period? Years Cash flow 0 -$31,000 1 15,600 2 10,200 3 8,700 4 7,100 • Question 19 4 out of 4 points A nine-year project is expected to generate annual revenues of $114,500, variable costs of $73,600, and fixed costs of $14,000. The annual depreciation is $3,500 and the tax rate is 34 percent. What is the annual operating cash flow? • Question 20 4 out of 4 points One year ago, you purchased 500 shares of stock for $12 a share. The stock pays $0.22 a share in dividends each year. Today, you sold your shares for $28.30 a share. What is your total dollar return on this investment? • Question 21 4 out of 4 points Braxton's Cleaning Company stock is selling for $32.60 a share based on a 14 percent rate of return. What is the amount of the next annual dividend if the dividends are increasing by 5 percent annually? • Question 22 4 out of 4 points An agent who buys and sells securities from inventory is called a: • Question 23 4 out of 4 points Suppose a stock had an initial price of $74 per share, paid a dividend of $0.80 per share during the year, and had an ending share price of $77. What was the capital gains yield? • Question 24 4 out of 4 points On which one of the following dates do dividends become a liability of the issuer for accounting purposes? • Question 25 4 out of 4 points Which one of the following is defined as the average compound return earned per year over a multiyear period? [Show More]

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