Exam 1 FIN370 Winter 2009 Version - A Key 

1. The process of managing a firm's long-term investments is called: a. capital structure management.b. asset allocation.c. risk management.D. capital budgeting.e. working capital management.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 1LEVEL OF DIFFICULTY: BASICRoss - Chapter 001 #1SECTION: 1.2TOPIC: CAPITAL BUDGETINGTYPE: DEFINITIONS 

2. Capital structure refers to the: a. combination of short-term and long-term assets held by a firm.B. mixture of debt and equity a firm uses to finance its operations.c. types of long-term assets a firm employs in its operations.d. amount of cash versus other short-term assets held by a firm.e. average amount of cash equivalents held by a firm.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 1LEVEL OF DIFFICULTY: BASICRoss - Chapter 001 #2SECTION: 1.2TOPIC: CAPITAL STRUCTURETYPE: DEFINITIONS 

3. A business organization owned by two or more individuals or entities, each of whom has unlimited liability for the firm's debts, is called a: a. limited liability company.b. limited partnership.c. dual company.d. joint stock company.E. general partnership.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 3LEVEL OF DIFFICULTY: BASICRoss - Chapter 001 #5SECTION: 1.3TOPIC: GENERAL PARTNERSHIPTYPE: DEFINITIONS 

4. The potential conflict of interest between a firm's owners and its managers is referred to as a(n): a. organizational problem.b. structure problem.C. agency problem.d. control issue.e. management conflict.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 4LEVEL OF DIFFICULTY: BASICRoss - Chapter 001 #7SECTION: 1.5TOPIC: AGENCY PROBLEMTYPE: DEFINITIONS 

5. Working capital management includes which of the following? I. establishing the inventory levelII. deciding when to pay suppliersIII. determining the amount of cash needed on a daily basisIV. establishing credit terms for customers a. I and II onlyb. III and IV onlyc. I, II, and III onlyd. I, II, and IV onlyE. I, II, III, and IV

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 1LEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 001 #20SECTION: 1.2TOPIC: WORKING CAPITAL MANAGEMENTTYPE: CONCEPTS 

6. A sole proprietorship: A. is relatively easy to create.b. involves significant legal costs during the formation process.c. has an unlimited life.d. is taxed as a separate legal entity.e. can generally raise significant capital from non-owner sources.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 3LEVEL OF DIFFICULTY: BASICRoss - Chapter 001 #22SECTION: 1.3TOPIC: SOLE PROPRIETORSHIPTYPE: CONCEPTS 

7. Which of the following are advantages of the corporate form of organization? I. ability to raise large sums of capitalII. ease of ownership transferIII. corporate taxationIV. unlimited firm life a. I and II onlyb. III and IV onlyc. II, III, and IV onlyD. I, II, and IV onlye. I, II, III, and IV

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 3LEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 001 #32SECTION: 1.3TOPIC: CORPORATIONTYPE: CONCEPTS 

8. The primary goal of financial management is to maximize the: a. current net income.b. net working capital.c. the number of shares outstanding.D. market value of the existing stock.e. revenue growth.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: BASICRoss - Chapter 001 #36SECTION: 1.4TOPIC: GOAL OF FINANCIAL MANAGEMENTTYPE: CONCEPTS 

9. Theresa sold 300 shares of MNO stock on the NYSE today. This transaction occurred in: a. a dealer market.b. the over-the-counter market.C. the secondary market.d. the primary market.e. a private placement.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEVEL OF DIFFICULTY: BASICRoss - Chapter 001 #53SECTION: 1.6TOPIC: SECONDARY MARKETTYPE: CONCEPTS 

10. Which of the following correctly describe a dealer market? I. Dealers match buyers with sellers.II. Dealers buy and sell for themselves at their own risk.III. Dealer trading occurs over-the-counter.IV. Dealer transactions occur on a trading floor. a. I and III onlyb. I and IV onlyC. II and III onlyd. II and IV onlye. I, II, and III only

 

BLOOMS TAXONOMY QUESTION TYPE: COMPREHENSIONLEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 001 #57SECTION: 1.6TOPIC: DEALER MARKETTYPE: CONCEPTS 

11. Auction markets: I. match sellers with buyers.II. have a physical location.III. consist solely of electronic trades.IV. are based on dealers. a. II onlyb. III onlyC. I and II onlyd. III and IV onlye. I, III, and IV only

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 001 #58SECTION: 1.6TOPIC: AUCTION MARKETTYPE: CONCEPTS 

12. Which one of the following statements is correct? a. The majority of the publicly traded firms in the U.S. are listed on the NYSE.b. The NYSE is a dealer market.c. NASDAQ is an auction market.D. The NYSE has the most stringent listing requirements.e. The trading floor for NASDAQ is located in Chicago.

 

BLOOMS TAXONOMY QUESTION TYPE: COMPREHENSIONLEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 001 #59SECTION: 1.6TOPIC: STOCK EXCHANGESTYPE: CONCEPTS 

13. Net working capital is defined as: a. cash, accounts receivable, and inventory.b. current assets.c. cash minus current liabilities.d. current assets plus current liabilities.E. current assets minus current liabilities.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEVEL OF DIFFICULTY: BASICRoss - Chapter 002 #1SECTION: 2.1TOPIC: NET WORKING CAPITALTYPE: DEFINITIONS 

14. The financial statement that summarizes a firm's operations over a period of time is called a(n): A. income statement.b. cash flow statement.c. production report.d. balance sheet.e. periodic operating statement.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: BASICRoss - Chapter 002 #3SECTION: 2.2TOPIC: INCOME STATEMENTTYPE: DEFINITIONS 

15. An expense that lowers net income but does not affect a firm's cash flow is referred to as a(n): a. indirect cost.b. direct cost.C. noncash item.d. period cost.e. variable cost.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: BASICRoss - Chapter 002 #4SECTION: 2.2TOPIC: NONCASH ITEMSTYPE: DEFINITIONS 

16. The average tax rate is defined as the: a. amount of tax due on the next dollar of taxable income.b. total tax paid divided by total revenue.c. amount of tax due on the next dollar of revenue.d. total tax paid divided by total assets.E. total taxes divided by total taxable income.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 3LEVEL OF DIFFICULTY: BASICRoss - Chapter 002 #5SECTION: 2.3TOPIC: AVERAGE TAX RATETYPE: DEFINITIONS 

17. The cash generated from a firm's normal business activities is referred to as the firm's: a. net profit.b. addition to retained earnings.c. operating margin.d. addition to net working capital.E. operating cash flow.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 4LEVEL OF DIFFICULTY: BASICRoss - Chapter 002 #8SECTION: 2.4TOPIC: OPERATING CASH FLOWTYPE: DEFINITIONS 

18. When net new borrowings are subtracted from the interest payments a firm pays to its creditors the result is called the: A. cash flow to creditors.b. free cash flow.c. cash flow from assets.d. operating cash flow.e. change in net working capital.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 4LEVEL OF DIFFICULTY: BASICRoss - Chapter 002 #10SECTION: 2.4TOPIC: CASH FLOW TO CREDITORSTYPE: DEFINITIONS 

19. Anderson Enterprises currently has $400 in cash. The company owes $1,200 to suppliers for merchandise and $4,500 to the bank for a long-term loan. Customers owe Anderson's $1,900. The inventory has a book value of $3,700 and an estimated market value of $4,400. If Anderson's compiled a financial statement today, how much would it show as the value of the current assets? a. $5,200b. $5,600C. $6,000d. $6,300e. $6,700

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEVEL OF DIFFICULTY: BASICRoss - Chapter 002 #55SECTION: 2.1TOPIC: CURRENT ASSETSTYPE: PROBLEMS 

20. The Bake Shoppe has net working capital of $6,100, long-term debt of $10,400, total debt of $15,200, and owners' equity of $18,900. What is the value of The Bake Shoppe's net fixed assets? a. $12,800b. $16,500c. $18,900d. $21,300E. $23,200

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 002 #56SECTION: 2.1TOPIC: NET FIXED ASSETSTYPE: PROBLEMS 

21. Grandel, Inc. has current liabilities of $10,200 and accounts receivable of $14,800. The firm has total assets of $39,700 and net fixed assets of $18,900. The owners' equity has a book value of $16,500. What is the amount of the net working capital? A. $10,600b. $20,800c. $23,200d. $25,400e. $31,000

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 002 #59SECTION: 2.1TOPIC: NET WORKING CAPITALTYPE: PROBLEMS 

22. The financial statements of Classic Collectables reflect cash of $15,800, accounts receivable of $31,600, accounts payable of $40,100, inventory of $54,700, long-term debt of $60,000, and net fixed assets of $99,500. The firm estimates that if it wanted to cease operations today it could sell the inventory for $39,000 and the fixed assets for $77,000. What is the market value of the assets? a. $63,300b. $101,500C. $163,400d. $181,700e. $201,600

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 1LEVEL OF DIFFICULTY: BASICRoss - Chapter 002 #70SECTION: 2.1TOPIC: MARKET VALUETYPE: PROBLEMS 

23. Baldwin, Inc. paid $18,500 in dividends and $44,600 in interest over the past year while net working capital increased from $10,200 to $28,200. The company purchased $30,000 in net new fixed assets and had depreciation expenses of $15,700. During the year, the firm issued $45,000 in net new equity and paid off $16,000 in long-term debt. What is the amount of Baldwin's cash flow from assets? a. $3,700b. $18,000c. $30,200D. $34,100e. $48,000

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 4LEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 002 #82SECTION: 2.4TOPIC: CASH FLOW FROM ASSETSTYPE: PROBLEMS 

24. Solomon, Inc. has net sales of $745,100 and costs of $590,800. The depreciation expense is $82,600 and the interest paid is $15,500. What is the amount of the firm's operating cash flow if the tax rate is 35 percent? a. $46,605b. $52,030c. $71,700d. $105,720E. $134,630

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 4LEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 002 #83SECTION: 2.4TOPIC: OPERATING CASH FLOWTYPE: PROBLEMS 

25. The internal growth rate is best described as the _____ growth rate achievable _____. a. minimum; if a firm retains all of its net incomeb. minimum; if a firm maintains a constant debt-equity ratioc. maximum; without any additional external equity financingD. maximum; without any additional external financing of any typee. maximum; if external debt financing is maximized

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: BASICRoss - Chapter 003 #4SECTION: 3.4TOPIC: INTERNAL GROWTH RATETYPE: DEFINITIONS 

26. The sustainable growth rate is best described as the _____ growth rate achievable _____. a. minimum; if a firm ceases all dividend paymentsb. minimum; if a firm maintains a constant equity multiplierc. maximum; without external financing of any kindd. maximum; if external debt financing is maximizedE. maximum; if a firm maintains a constant debt-equity ratio and does not issue any additional equity securities

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: BASICRoss - Chapter 003 #5SECTION: 3.4TOPIC: SUSTAINABLE GROWTH RATETYPE: DEFINITIONS 

27. A common-size income statement: I. expresses all values as a percent of total assets.II. should reflect a relatively constant cost of goods sold unless a firm changed the percent that it uses to mark up the wholesale price to get the retail price.III. expresses net income as 100 percent.IV. can be used to compare the performance of a firm both over time and against its industry. a. I and III onlyB. II and IV onlyc. III and IV onlyd. I, II, and III onlye. II, III, and IV only

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 1LEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 003 #8SECTION: 3.1TOPIC: COMMON-SIZE STATEMENTTYPE: CONCEPTS 

28. Which one of the following actions will decrease the current ratio, all else constant? Assume the current ratio is greater than 1.0. A. purchasing inventory on creditb. paying an account payablec. collecting payment from a customerd. selling inventory at a profit in a charge salee. selling inventory at cost in a cash sale

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 003 #11SECTION: 3.2TOPIC: CURRENT RATIOTYPE: CONCEPTS 

29. A firm has a times interest earned ratio of 2. This means that the firm has twice as much: a. net income as it does interest expense.b. interest expense as it does net income.C. earnings before interest and taxes as it does interest expense.d. interest expense as it does earnings before interest and taxes.e. operating cash flow as it does interest expense.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: BASICRoss - Chapter 003 #16SECTION: 3.2TOPIC: TIMES INTEREST EARNEDTYPE: CONCEPTS 

30. The profit margin is the amount of net profit earned for every $1 of: a. total assets.b. equity.c. long-term debt.D. sales.e. external financing.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: BASICRoss - Chapter 003 #21SECTION: 3.2TOPIC: PROFIT MARGINTYPE: CONCEPTS 

31. A firm has inventory of $1,200, accounts payable of $600, cash of $130, net fixed assets of $2,100, long-term debt of $1,900, accounts receivable of $400, and total equity of $1,330. What is the common-size percentage for the net fixed assets? A. 54.83 percentb. 56.76 percentc. 61.22 percentd. 63.36 percente. 65.02 percent

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 1LEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 003 #37SECTION: 3.1TOPIC: COMMON-SIZE STATEMENTSTYPE: PROBLEMS 

32. You are analyzing a company that has cash of $2,000, accounts receivable of $3,700, fixed assets of $10,900, accounts payable of $6,600, and inventory of $4,100. What is the quick ratio? a. .30b. .67C. .86d. 1.48e. 3.30

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: BASICRoss - Chapter 003 #45SECTION: 3.2TOPIC: QUICK RATIOTYPE: PROBLEMS 

33. The Fruit Co. has total assets of $7,800, fixed assets of $7,100, current liabilities of $1,500, and long-term liabilities of $4,600. What is the total debt ratio? a. .41b. .60c. .65D. .78e. .86

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: BASICRoss - Chapter 003 #49SECTION: 3.2TOPIC: TOTAL DEBT RATIOTYPE: PROBLEMS 

34. A firm has total assets of $456,000 and total equity of $217,000. What is the debt-equity ratio? a. .48b. .68C. 1.10d. 1.48e. 2.10

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: BASICRoss - Chapter 003 #51SECTION: 3.2TOPIC: DEBT-EQUITY RATIOTYPE: PROBLEMS 

35. The Laptop Company has sales of $874,000, a profit margin of 9 percent, a total asset turnover rate of .80, and an equity multiplier of 1.75. What is the return on equity? a. 5.14 percentb. 7.20 percentc. 10.86 percentD. 12.60 percente. 15.75 percent

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 3LEVEL OF DIFFICULTY: BASICRoss - Chapter 003 #81SECTION: 3.3TOPIC: DU PONT IDENTITYTYPE: PROBLEMS 

36. A firm has a return on equity of 14 percent, a return on assets of 9.5 percent, and a 30 percent dividend payout ratio. What is the sustainable growth rate? a. 2.93 percentb. 4.38 percentc. 7.12 percentd. 9.58 percentE. 10.86 percent

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 3LEVEL OF DIFFICULTY: BASICRoss - Chapter 003 #102SECTION: 3.4TOPIC: SUSTAINABLE GROWTH RATETYPE: PROBLEMS 

37. The value of an investment after one or more time periods is called the: a. true value.B. future value.c. present value.d. discounted value.e. complex value.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEVEL OF DIFFICULTY: BASICRoss - Chapter 004 #1SECTION: 4.1TOPIC: FUTURE VALUETYPE: DEFINITIONS 

38. The process of adding the interest earned on an investment to the original investment in order to earn more interest is called: a. discounting.B. compounding.c. duplicating.d. multiplying.e. indexing.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEVEL OF DIFFICULTY: BASICRoss - Chapter 004 #2SECTION: 4.1TOPIC: COMPOUNDINGTYPE: DEFINITIONS 

39. By definition, a bank that pays simple interest on a savings account will pay interest: a. only at the beginning of the investment period.b. only at the end of the investment period.C. only on the initial investment.d. on both the initial investment and all prior interest payments that are reinvested.e. only if all previous interest payments are reinvested.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEVEL OF DIFFICULTY: BASICRoss - Chapter 004 #5SECTION: 4.1TOPIC: SIMPLE INTERESTTYPE: DEFINITIONS 

40. The current value of future cash flows discounted at the appropriate discount rate is called the: a. simple value.b. future value.C. present value.d. complex value.e. principal value.

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEVEL OF DIFFICULTY: BASICRoss - Chapter 004 #6SECTION: 4.2TOPIC: PRESENT VALUETYPE: DEFINITIONS 

41. Which one of the following will increase the future value of a lump sum invested today? a. decreasing the amount of the lump sumB. increasing the rate of interestc. paying simple interest rather than compound interestd. paying interest only at the end of the investment periode. shortening the investment time period

 

BLOOMS TAXONOMY QUESTION TYPE: COMPREHENSIONLEARNING OBJECTIVE NUMBER: 1LEVEL OF DIFFICULTY: BASICRoss - Chapter 004 #10SECTION: 4.1TOPIC: FUTURE VALUETYPE: CONCEPTS 

42. An increase in which of the following will increase the future value of a lump sum investment made today assuming that all interest is reinvested? Assume the interest rate is a positive value. I. interest rateII. amount of the lump sumIII. frequency of the interest paymentsIV. length of the investment period a. I and III onlyb. II and IV onlyc. I, II, and IV onlyd. II, III, and IV onlyE. I, II, III, and IV

 

BLOOMS TAXONOMY QUESTION TYPE: COMPREHENSIONLEARNING OBJECTIVE NUMBER: 1LEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 004 #17SECTION: 4.1TOPIC: FUTURE VALUETYPE: CONCEPTS 

43. You want to invest an amount of money today and receive back twice that amount in the future. You expect to earn 6 percent interest. Approximately how long must you wait for your investment to double in value? a. 6 yearsb. 8 yearsc. 9 yearsd. 10 yearsE. 12 years

 

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGELEARNING OBJECTIVE NUMBER: 4LEVEL OF DIFFICULTY: BASICRoss - Chapter 004 #27SECTION: 4.3TOPIC: RULE OF 72TYPE: CONCEPTS 

44. Today, you deposit $10,750 in a bank account that pays 3 percent simple interest. How much interest will you earn over the next 7 years? a. $1,935.00b. $2,086.06C. $2,257.50d. $2,471.14e. $2,580.00

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 1LEVEL OF DIFFICULTY: BASICRoss - Chapter 004 #28SECTION: 4.1TOPIC: SIMPLE INTERESTTYPE: PROBLEMS 

45. Your parents just gave you a gift of $25,000. You are investing this money for 5 years at 2.5 percent simple interest. How much money will you have at the end of the 5 years? a. $27,500b. $27,595C. $28,125d. $28,285e. $28,750

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 1LEVEL OF DIFFICULTY: BASICRoss - Chapter 004 #29SECTION: 4.1TOPIC: SIMPLE INTERESTTYPE: PROBLEMS 

46. Karen has $16,000 that she wants to invest for 1 year. She can invest this amount at The North Bank and earn 5.50 percent simple interest. Or, she can open an account at The South Bank and earn 5.39 percent interest, compounded monthly. If Karen decides to invest at The North Bank, she will: a. earn $17.60 more than if she had invested with The South Bank.B. earn $4.03 less than if she had invested with The South Bank.c. earn the same amount as if she had invested with The South Bank.d. have a total balance of $16,800 in her account after 1 year.e. have a total balance of $16,862.40 in her account after 1 year.

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 1LEVEL OF DIFFICULTY: INTERMEDIATERoss - Chapter 004 #33SECTION: 4.1TOPIC: SIMPLE VERSUS COMPOUND INTERESTTYPE: PROBLEMS 

47. Thirteen years from now, you will be inheriting $30,000. What is this inheritance worth to you today if you can earn 4 percent interest compounded annually? A. $18,017.22b. $20,741.87c. $23,190.98d. $26,359.88e. $28,846.15

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 2LEVEL OF DIFFICULTY: BASICRoss - Chapter 004 #43SECTION: 4.2TOPIC: PRESENT VALUETYPE: PROBLEMS 

48. You have $2,000 today and want to quadruple your money in 10 years. What interest rate must you earn? a. 7.18 percentb. 11.61 percentC. 14.87 percentd. 20.13 percente. 23.11 percent

 

BLOOMS TAXONOMY QUESTION TYPE: APPLICATIONLEARNING OBJECTIVE NUMBER: 3LEVEL OF DIFFICULTY: BASICRoss - Chapter 004 #50SECTION: 4.3TOPIC: INTEREST RATETYPE: PROBLEMS 

Exam 1 FIN370 Winter 2008 Summary

Category #   of   Questions BLOOMS TAXONOMY QUESTION TYPE: APPLICATION 19BLOOMS TAXONOMY QUESTION TYPE: COMPREHENSION 4BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE 25LEARNING OBJECTIVE NUMBER: 1 11LEARNING OBJECTIVE NUMBER: 2 12LEARNING OBJECTIVE NUMBER: 3 7LEARNING OBJECTIVE NUMBER: 4 6LEVEL OF DIFFICULTY: BASIC 34LEVEL OF DIFFICULTY: INTERMEDIATE 14Ross - Chapter 001 12Ross - Chapter 002 12Ross - Chapter 003 12Ross - Chapter 004 12SECTION: 1.2 3SECTION: 1.3 3SECTION: 1.4 1SECTION: 1.5 1SECTION: 1.6 4SECTION: 2.1 5SECTION: 2.2 2SECTION: 2.3 1SECTION: 2.4 4SECTION: 3.1 2SECTION: 3.2 6SECTION: 3.3 1SECTION: 3.4 3SECTION: 4.1 8SECTION: 4.2 2SECTION: 4.3 2TOPIC: AGENCY PROBLEM 1TOPIC: AUCTION MARKET 1TOPIC: AVERAGE TAX RATE 1TOPIC: CAPITAL BUDGETING 1TOPIC: CAPITAL STRUCTURE 1TOPIC: CASH FLOW FROM ASSETS 1TOPIC: CASH FLOW TO CREDITORS 1TOPIC: COMMON-SIZE STATEMENT 1TOPIC: COMMON-SIZE STATEMENTS 1TOPIC: COMPOUNDING 1TOPIC: CORPORATION 1TOPIC: CURRENT ASSETS 1TOPIC: CURRENT RATIO 1TOPIC: DEALER MARKET 1

TOPIC: DEBT-EQUITY RATIO 1TOPIC: DU PONT IDENTITY 1TOPIC: FUTURE VALUE 3TOPIC: GENERAL PARTNERSHIP 1TOPIC: GOAL OF FINANCIAL MANAGEMENT 1TOPIC: INCOME STATEMENT 1TOPIC: INTEREST RATE 1TOPIC: INTERNAL GROWTH RATE 1TOPIC: MARKET VALUE 1TOPIC: NET FIXED ASSETS 1TOPIC: NET WORKING CAPITAL 2TOPIC: NONCASH ITEMS 1TOPIC: OPERATING CASH FLOW 2TOPIC: PRESENT VALUE 2TOPIC: PROFIT MARGIN 1TOPIC: QUICK RATIO 1TOPIC: RULE OF 72 1TOPIC: SECONDARY MARKET 1TOPIC: SIMPLE INTEREST 3TOPIC: SIMPLE VERSUS COMPOUND INTEREST 1TOPIC: SOLE PROPRIETORSHIP 1TOPIC: STOCK EXCHANGES 1TOPIC: SUSTAINABLE GROWTH RATE 2TOPIC: TIMES INTEREST EARNED 1TOPIC: TOTAL DEBT RATIO 1TOPIC: WORKING CAPITAL MANAGEMENT 1TYPE: CONCEPTS 15TYPE: DEFINITIONS 16TYPE: PROBLEMS 17