FIN 571 Final Exam with Questions and Answers at Studentwhiz

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FIN 571 Final Exam
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• 1. In a general partnership, the general partners
  have _____liability and have _____control over
  day-to-day operations.
• limited no
• no total
• unlimited no
• limited total
• unlimited total
• 2. Which one of these is a correct definition?
• Long-term debt is defined as a residual claim on
  a firms assets.
• Net working capital equals current assets plus
  current liabilities.
• Current liabilities are debts that must be repaid
  in 18 months or less.
• Tangible assets are fixed assets such as patents.
• Current assets are assets with short lives, such
  as inventory.

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• 3. The owners of a limited liability company
  generally prefer
• being taxed personally on all business income.
• having liability exposure similar to that of a
  general partner.
• having liability exposure similar to that of a
  sole proprietor.
• being taxed like a corporation.
• being taxed like a corporation with liability
  like a partnership.
• 4.Which one of the following is least apt to help
  convince managers to work in the best interest of
  the stockholders? pay raises based on length of
  service
• implementation of a stock option plan
• threat of a proxy fight
• management compensation tied to the market value
  of the firms stock
• threat of a takeover of the firm by unsatisfied
  stockholders

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5. a. Compute the future value of 2,000
compounded annually for 20 years at 4 percent.
(Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)
Future value _________ b. Compute the future
value of 2,000 compounded annually for 15 years
at 10 percent. (Do not round intermediate
calculations and round your answer to 2 decimal
places, e.g., 32.16.) Future value
_________ c. Compute the future value of 2,000
compounded annually for 25 years at 4 percent.
(Do not round intermediate calculations and round
your answer to 2 decimal places, e.g., 32.16.)
Future value _______ Complete Answers
here-fin 571 final exam answers __
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6. For each of the following, compute the present
value (Do not round intermediate calculations and
round your answers to 2 decimal places, e.g.,
32.16.) Present Value Years
Interest Rate Future value _________
14 8
15,551 _________ 5
14 52,557
_________ 30
15 887,073
_________ 35 8
551,164
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7. First City Bank pays 8 percent simple interest
on its savings account balances, whereas Second
City Bank pays 8 percent interest compounded
annually. If you made a 74,000 deposit in each
bank, how much more money would you earn from
your Second City Bank account at the end of 8
years? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g.,
32.16.) Difference in accounts
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fin 571 final exam answers
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• 8. Winslow, Inc. stock is currently selling for
  40 a share. The stock has a dividend yield of
  3.8 percent. How much dividend income will you
  receive per year if you purchase 500 shares of
  this stock?
• 1,053
• 152
• 190
• 329
• 760
• 9. You bought 360 shares of stock at a total cost
  of 7,754.40. You received a total of 403.20 in
  dividends and sold your shares for 19.98 a
  share. What was your total rate of return?
• 5.38
• 7.24
• -1.29
• 3.67
• -2.04

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• 10. According to generally accepted accounting
  principles (GAAP), revenue is recognized as
  income when
• income taxes are paid on the revenue earned.
• the transaction is complete and the goods or
  services are delivered.
• a contract is signed to perform a service or
  deliver a good.
• payment is requested.
• managers decide to recognize it.
• 11. Sankey, Inc., has current assets of 4,230,
  net fixed assets of 25,700, current liabilities
  of 3,500, and long-term debt of 14,400. (Do not
  round intermediate calculations.)
• What is the value of the shareholders' equity
  account for this firm?
• Shareholders' equity _________
• How much is net working capital?
• Net working capital _________

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• 12. The financial statement summarizing a firm's
  accounting performance over a period of time is
  the
• statement of equity..
• income statement.
• tax reconciliation statement.
• balance sheet.
• statement of cash flows.
• Find the final exam answers here-fin 571 final
  exam 3 sets

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• 13. Net working capital is defined as
• current assets minus current liabilities.
• total assets minus total liabilities.
• fixed assets minus long-term liabilities.
• current assets plus stockholders' equity.
• current assets plus fixed assets.
• 14. Jessica's Boutique has cash of 59, accounts
  receivable of 62, accounts payable of 210, and
  inventory of 140. What is the value of the quick
  ratio?
• .30
• 1.82
• .67
• .58
• 1.24

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• 15. Al's Sport Store has sales of 2,940, costs
  of goods sold of 2,090, inventory of 526, and
  accounts receivable of 445. How many days, on
  average, does it take the firm to sell its
  inventory assuming that all sales are on credit?
• 90.6
• 65.3
• 119.9
• 91.9
• 120.4
• 16.What is the return on equity for 2009?
• 14 percent
• 17 percent
• 11 percent
• 16 percent
• 19 percent

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• 17. Reliable Cars has sales of 3,790, total
  assets of 3,350, and a profit margin of 5
  percent. The firm has a total debt ratio of 41
  percent. What is the return on equity?
• 9.59 percent
• 12.20 percent
• 13.80 percent
• 8.47 percent
• 5.66 percent
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  2015

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• 18. A firm has a debt-equity ratio of .41. What
  is the total debt ratio?
• 1.44
• .31
• .29
• 1.41
• .69
• 19.The return on equity can be calculated as
• ROA Equity multiplier.
• ROA Debt-equity ratio.
• ROA (Net income / Total assets).
• Profit margin ROA Total asset turnover.
• Profit margin ROA.

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• 20.One of the primary weaknesses of many
  financial planning models is that they
• rely too much on financial relationships and too
  little on accounting relationships.
• are iterative in nature.
• ignore the goals and objectives of senior
  management.
• ignore cash payouts to stockholders.
• ignore the size, risk, and timing of cash flows.
• Find the quiz answers here-fin 571 final exam 4
  different

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• 21. In the financial planning model, the external
  financing needed (EFN) as shown on a pro forma
  balance sheet is equal to the changes in assets
• minus the change in retained earnings.
• minus the changes in both liabilities and equity.
• minus the changes in liabilities.
• plus the changes in both liabilities and equity.
• plus the changes in liabilities minus the changes
  in equity.
• 22.The Wintergrass Company has an ROE of 15.1
  percent and a payout ratio of 40 percent.
• What is the companys sustainable growth rate?
  (Do not round intermediate calculations and enter
  your answer as a percent rounded to 2 decimal
  places, e.g., 32.16.)
• Sustainable growth rate _________

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23.Assume the following ratios are constant
Total asset turnover 2.50 Profit margin
5.4 Equity multiplier 1.30
Payout ratio 35 What is the sustainable
growth rate?(Do not round intermediate
calculations and enter your answer as a percent
rounded to 2 decimal places, e.g.,
32.16.) Sustainable growth rate
_________ Download for answers -fin 571 final
exam 2015
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• 24.The length of time between the acquisition of
  inventory and its sale is called the
• cash cycle.
• 3accounts payable period.
• accounts receivable period.
• inventory period.
• operating cycle.
• 25.A prearranged, short-term bank loan made on a
  formal or informal basis,
• and typically reviewed for renewal annually, is
  called a
• compensating balance.
• cleanup loan.
• roll-over.
• line of credit.
• letter of credit.

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• 26. The _____ premium is that portion of the bond
  yield that represents compensation for potential
  difficulties that might be encountered should the
  bond holder wish to sell the bond prior to
  maturity.
• default risk
• liquidity
• taxability
• inflation
• interest rate risk
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  sets

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• 27. How much are you willing to pay for one share
  of stock if the company just paid an annual
  dividend of 1.03, the dividends increase by 3
  percent annually, and you require a rate of
  return of 15 percent?
• 8.84
• 6.87
• 9.49
• 10.40
• 8.58
• 28. The rate at which a stock's price is expected
  to appreciate (or depreciate) is called the _____
  yield.
• total
• capital gains
• current
• earnings
• dividend

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