Quiz4 - Answers for quizz 4 of Corporate Finance PDF

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Answers for quizz 4 of Corporate Finance...

Description

4/8/2018

Review Test Submission: Take-home 4 – 2017/2018 - 30017 ...

XAVIER BERNARD

Bocconi Courses

2017/2018 - 30017 CORPORATE FINANCE cl. 15

Quizzes & Cases

11

Content Collection

Week 4

Review Test Submission: Take-home 4

Review Test Submission: Take-home 4

User

XAVIER BERNARD

Course

2017/2018 - 30017 CORPORATE FINANCE cl. 15

Test

Take-home 4

Started

3/1/18 3:19 PM

Submitted

3/1/18 3:39 PM

Due Date

3/5/18 8:00 AM

Status

Completed

Attempt Score 100 out of 100 points  Time Elapsed

20 minutes out of 1 hour

Results Displayed

All Answers, Submitted Answers, Correct Answers, Feedback, Incorrectly Answered Questions

Question 1

6.25 out of 6.25 points

If the present value of $6000 expected to be received one year from today is $400, what is the one-year discount rate? Selected Answer:

1400%

Answers:

1400% 140% 14% 14000% 1.4% 140000%

Question 2

6.25 out of 6.25 points

Given the following data: Sales = 3,373; Cost of good sold = 1,504; Average receivables = 298, calculate the average collection period, precise to 2 digits after the comma (assume no leap year): Selected Answer:

32.25

Correct Answer:

32.25 ± 0

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4/8/2018

Review Test Submission: Take-home 4 – 2017/2018 - 30017 ...

Question 3

6.25 out of 6.25 points

The survey of CFOs indicates that the IRR method is used for evaluating investment projects by: Selected Answer: Answers:

76% of rms 24% of rms 20% of rms 57% of rms 12% of rms 76% of rms

Question 4

6.25 out of 6.25 points

What does inventory consist of? Select all that apply.

Selected Answers:

Raw material Finished goods Work in progress

Answers:

Raw material Goodwill Cash Finished goods Work in progress Property plant and equipment Brand value

Question 5

6.25 out of 6.25 points

Consider the NPV function of the investment project shown below. Which statements are correct? Select all that apply.

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4/8/2018

Review Test Submission: Take-home 4 – 2017/2018 - 30017 ...

Selected Answers:

NPV is positive for discount rates below 0.28 NPV decreases with increasing discount rates. NPV is negative for discount rates above 0.28 NPV is exactly zero at a discount rate of 0.28

Answers:

NPV will reach innity as the discount rate approaches zero. NPV is positive for discount rates below 0.28 NPV decreases with increasing discount rates. The project has negative NPV. The project's IRR cannot be calculated. NPV is negative for discount rates above 0.28 NPV is exactly zero at a discount rate of 0.28

Question 6

6.25 out of 6.25 points

Assets are listed on the balance sheet in order of (select all that apply):

Selected Answers:

...how quickly and easily they can be converted to cash ...liquidity

Answers:

...size ...how quickly and easily they can be converted to cash ...liquidity ...importance ...depreciation ...market value

Question 7

6.25 out of 6.25 points

The survey of CFOs indicates that the NPV method is always, or almost always, used for evaluating investment projects by: Selected Answer: Answers:

75% of rms 12% of rms 57% of rms

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4/8/2018

Review Test Submission: Take-home 4 – 2017/2018 - 30017 ...

75% of rms 40% of rms 20% of rms

Question 8

6.25 out of 6.25 points

Managers in the UK and in Japan dier in the sense that... Selected Answers: UK managers would use extra money to pay higher dividends,while Japanese managers would use extra money to increase job security

UK managers have nancial beliefs that are similar to US managers, while Japanese managers have nancial beliefs that are more simiarto French managers UK managers are subject to UK cultural norms,while Japanese managers are subject to Japanese cultural norms.Cultural norms dier strongly between countries. UK managers think that the rm belongs to the shareholders only, while Japanese managers think that the rm belongs to all stakeholders Answers:

UK managers would use extra money to pay higher dividends,while Japanese managers would use extra money to increase job security UK managers have nancial beliefs that are similar to US managers, while Japanese managers have nancial beliefs that are more simiarto French managers UK managers are subject to UK cultural norms,while Japanese managers are subject to Japanese cultural norms.Cultural norms dier strongly between countries. UK managers are less well trained than Japanese managers UK managers would use extra money to increase job security,while Japanese managers would use extra money to pay higher dividends UK managers think that the rm belongs to the shareholders only, while Japanese managers think that the rm belongs to all stakeholders

Question 9

6.25 out of 6.25 points

If the present value of $350 expected to be received one year from today is $340, what is the discount rate? Selected Answer:

2.9%

Answers:

2.9% 1.9% 3.9%

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4/8/2018

Review Test Submission: Take-home 4 – 2017/2018 - 30017 ...

4.9% 5.9% 6.9% 7.9% 8.9% 9.9%

Question 10

6.25 out of 6.25 points

The route of cash ows between nancial markets and rms is typically as follows Question Correct Match

Selected Match

First

E. Cash raised from investors

E. Cash raised from investors

Second

H. Cash invested in the rm

H. Cash invested in the rm

Third

F. Cash generated by operations

F. Cash generated by operations

Fourth

A. Cash reinvested or returned to investors

A. Cash reinvested or returned to investors

All Answer Choices A. Cash reinvested or returned to investors

Cash lost by corruption B.

Cash raised from the government C. D. Cash raised from a marketing sponsor E. Cash raised from investors F. Cash generated by operations

Cash invested in nancial assets G. H. Cash invested in the rm

Question 11

6.25 out of 6.25 points

Assume the following data: Long term bank debt=139, Long term leases=36, Book value of equity=164, Market value of equity=162. Calculate the debt-equity ratio, precise to 2 digits after the comma:

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4/8/2018

Review Test Submission: Take-home 4 – 2017/2018 - 30017 ...

Selected Answer:

1.07

Correct Answer:

1.07 ± 1%

Question 12

6.25 out of 6.25 points

An initial investment of $400,000 will produce an end of year cash ow of $480,000. What is the NPV of the project at a discount rate of 2%? Selected Answer:

70588

Answers:

70588 -70588 71588 70488 70568 70589

Question 13

6.25 out of 6.25 points

A sole proprietorship is owned by: Selected Answer: Answers:

one person. shareholders. two of more persons. bankers. one person.

Question 14

6.25 out of 6.25 points

A piece of capital equipment costing $196 today has no (zero) salvage value at the end of 5 years. If straight-line depreciation is used, what is the book value of the equipment at the end of three years?(Do not enter the dollar sign) Selected Answer:

78.4

Correct Answer:

78 ± 1%

Question 15

6.25 out of 6.25 points

In a corporation, the ultimate decisions regarding business matters are made by: Selected Answer: Answers:

the Board of Directors. shareholders. the Board of Directors. investors.

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4/8/2018

Review Test Submission: Take-home 4 – 2017/2018 - 30017 ...

debt holders.

Question 16

6.25 out of 6.25 points

Considering the dividend discount model,which statement is FALSE? Selected Answer:

During periods of high growth,it is not unusual for rms to pay out 100%of their earnings to shareholders in the form of dividends.

Answers:

During periods of high growth,it is not unusual for rms to pay out 100%of their earnings to shareholders in the form of dividends. The dividend each year is the rm's earnings per share (EPS) multiplied by its dividend payout ratio. A common approximation is to assume that in the long run,dividends will grow at a constant rate. There is tremendous uncertainty associated with any forecast of a rm's future dividends, and therefore its dividend growth rate. Sunday, April 8, 2018 6:22:56 PM CEST

← OK

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