## Description

**STR 581 Capstone Final Exam Part 2**

- Which of the following presents a summary of changes in a firm’s balance sheet from the beginning of an accounting period to the end of that accounting period?
- If a company’s weighted average cost of capital is less than the required return on equity, then the firm:
- External financing needed: Jockey Company has total assets worth $4,417,665. At year-end it will have net income of $2,771,342 and pay out 60 percent as dividends. If the firm wants no external financing, what is the growth rate it can support?
- Firms that achieve higher growth rates without seeking external financing:
- TuleTime Comics is considering a new show that will generate annual cash flows of $100,000 into the infinite future. If the initial outlay for such a production is $1,500,000 and the appropriate discount rate is 6 percent for the cash flows, then what is the profitability index for the project?
- Horizontal analysis is also known as
- The cash conversion cycle?
- Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon rate. Investors buying the bond today can expect to earn a yield to maturity of 6.875 percent. What should the company’s bonds be priced at today? Assume annual coupon payments. (Round to the nearest dollar.)
- Internal reports that review the actual impact of decisions are prepared by:Jack Robbins is saving for a new car. He needs to have $21,000 for the car in three years. How much will he have to invest today in an account paying 8 percent annually to achieve his target? (Round to nearest dollar)
- What decision criteria should managers use in selecting projects when there is not enough capital to invest in all available positive NPV projects?
- Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)
- Gateway, Corp. has an inventory turnover of 5.6. What is the firm’s days’s sales in inventory?
- M&M Proposition 1: Dynamo Corp. produces annual cash flows of $150 and is expected to exist forever. Your analysis tells you that the appropriate discount rates are 10 percent for the cash flows, and 7 percent for the debt. You currently own 10 percent of the stock.
- If Dynamo wishes to change its capital structure from 75 percent equity to 60 percent equity and use the debt proceeds to pay a special dividend to shareholders, how much debt should they use?
- Variance reports are str 581 capstone final exam
- The process of evaluating financial data that change under alternative courses of action….
- The major element in budgetary control is:
- Which of the following is considered a hybrid organizational form?
- Process costing is used when:
- Your firm has an equity multiplier of 2.47. What is the debt-to-equity ratio?
- The group of users of accounting information charged with achieving the goals of the business is its:
- Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?
- When a company assigns the costs of direct materials, direct labor, and both variable and fixed manufacturing overhead to products, that company is using:
- The convention of consistency refers to consistent use of accounting principles:
- An unrealistic budget is more likely to result when it str 581 capstone final exam
- The most important information needed to determine if companies can pay their current obligations is the:
- Teakap, Inc. has current assets of $1,456,312 and total assets of $4,812,369 for the year ending September 30, 2006. It also has current liabilities of $1,041,012, common equity of $1,500,000 and retained earnings of $1,468,347. How much long-term debt does the firm have?
- Ajax Corp. is expecting the following cash flows – $79,000, $112,000, $164,000, $84,000, and $242,000 – over the next five years. If the company’s opportunity cost is 15 percent, what is the present value of these cash flows? (Round to the nearest dollar.)
- Turnbull Corp. had an EBIT of $247 million in the last fiscal year. Its depreciation and amortization expenses amounted to $84 million. The firm has 135 million shares outstanding and a share price of $12.80. A competing firm that is very similar to Turnbull has an enterprise value/EBITDA multiple of 5.40 str 581 capstone final exam
- What is the enterprise value of Turnbull Corp.? Round to the nearest million dollars.
- Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the following three years. If their required rate of return if 14 percent, what is the present value of their dividends over the next four years?
- An activity that has a direct cause-effect relationship with the resources consumed is a(n):
- JayadevAthreya has started his first job. He will invest $5,000 at the end of each year for the next 45 years in a fund that will earn a return of 10 percent. How much will Jayadev have at the end of 45 years?
- The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area…..
- Which of the following financial statements is concerned with the company at a point in time?
- The break-even point is where str 581 capstone final exam
- How firms estimate their cost of capital: The WACC for a firm is 13.00 percent. You know that the firm’s cost of debt capital is 10 percent and the cost of equity capital is 20% What proportion of the firm is financed with debt?
- Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time:
- A cost which remains constant per unit at various levels of activity is a: