Question #3 (1 point) Suppose a firm’s sales increased from $4 million in 2008 to more than $7 million in 2012. What has been the average annual growth rate in sales? 13% 15% 12% 14% Question #4 (1 point) The expected value of a normal distribution of prices for a stock is $30. If you are 99% sure that the price of the stock will be between $20 and $40 then what is the variance of the stock price. $6.08 $26.03 $15.08 $36.95 Question #5 (1 point) Assume today is January 1st. If a wealthy relative offered to set aside an initial $4 000 today and then an additional $10 000 at the end of each year (the first being on December 31st of this year) for the next 5 years how much would you have in your account after 5 years if the funds grew at 10%? $61 051 $109 733 $67 493 $40 525 Question #6 (1 point) Duane Corp. has taxable income of $90 000. What is the firm’s average tax rate? (Use Exhibit 3.6 in your text.) 22.3% 20.9% 34.0% 19.3% Question #7 (1 point) About 75 percent of all businesses in the United States are sole proprietorships. True False Question #8 (1 point) The following data can be found on Silverton Inc.’s 2012 balance sheet: Cash $45 000 Marketable Securities $70 000 Accounts Receivable $500 000 Inventory $525 000 Net Plant and Equipment $400 000 Accounts Payable $75 000 and Notes Payable $350 000. Please calculate Silverton Inc.’s Quick Ratio. 2.68 0.21 1.45 2.39 Question #9 (1 point) Sainsbury Inc. has a beta of 0.8. If the expected market return is 13.5% and the risk-free rate is 6% what is the appropriate required return of Sainsbury (using the CAPM)? 9.3% 11.1% 10.2% 12.0% Question #10 (1 point) The following data can be found on Stevenson Inc.’s balance sheet: Cash of $300 000; marketable securities of $120 000; accounts receivable of $1 000 000; inventory of $750 000; net plant and equipment of $900 000; and total current liabilities of $960 000. Calculate Jorgonson Inc.’s net working capital. $2 110 000 $1 210 000 $460 000 $640 000 Question #11 (1 point) In investment banking the process by which the investment banker helps the company sell its new security issue is called underwriting marketing distribution origination Question #12 (1 point) We wish to accumulate $20 000 after 10 years. If we can secure an interest rate of 11% how much must be set aside at the end of each of the ten periods? $932 $945 $1196 $1079 Question #13 (1 point) Assume you wanted to double the amount of money in your savings account in the next nine years. Approximately what interest rate would you need to earn to accomplish this? 8% 10% 12% unable to determine based on the information provided Question #14 (1 point) Peter’s bank will pay him interest compounded quarterly (4 times a year) for 36 months (3 years). If peter deposits $3 000 and earns an annual 4% rate of return how much will Peter have at the end of 36 months? $3 380 $2 667 $3 375 $3 517 Question #15 (1 point) Gemini Inc.’s debt increases while their assets and return on assets remain unchanged. Gemini’s return on equity will increase decrease remain unchanged cannot be determined from the information provided. Question #16 (1 point) Which of the following is considered a current liability? inventories accounts payable net plant and equipment all of the above Question #17 (1 point) Bright Light Company has $500 000 in assets and $200 000 of debt. They report net income of $50 000. What is their return on assets? 18.3% 16.7% 25.0% 10.0% Question #18 (1 point) Stephen wants to determine the most she should pay to purchase an ordinary annuity. It consists of cash flows of $1 000 at the end of each year for 10 years. He requires a minimum return of at least 10%. $3 245 $6 145 $1 800 $9 000
