FIN370 – What are the tools available for the manager in financial planning

FIN370 – What are the tools available for the manager in financial planning

FIN370 – What are the tools available for the manager in financial planning

Subject: Business    / Finance
Question

What are the tools available for the manager in financial planning?

Delaying disbursement of cash, reducing collection period, cash management, and Increasing inventory turnover

Delaying disbursement of cash and cash management

Increasing inventory turnover and reducing collection period

Reducing collection period and delaying disbursement of cash

As new capital budgeting projects arise, we must estimate__________.

when such projects will require cash flows

the float costs for financing the project

the cost of the loan for the specific project

the cost of the stock being sold for the specific project

Five years ago, Jane invested $5,000 and locked in an 8 percent annual interest rate for 25 years (ending 20 years from now). James can make a 20-year investment today and lock in a 10 percent interest rate. How much money should he invest now in order to have the same amount of money in 20 years as Jane?

$3,160.43

$3,464.11

$5,089.91

$7,346.64

A firm is expected to pay a dividend of $2.00 next year and $2.14 the following year. Financial analysts believe the stock will be at their target price of $75.00 in two years. Compute the value of this stock with a required return of 10 percent.

$79.14

$65.40

$66.67

$65.57

The overall goal of the financial manager is to__________.

maximize shareholder wealth

maximize net income

minimize total costs

maximize earnings per share

Suppose that Model Nails, Inc.’s capital structure features 60 percent equity, 40 percent debt, and that its before-tax cost of debt is 6 percent, while its cost of equity is 10 percent. If the appropriate weighted average tax rate is 28 percent, what will be Model Nails’ WACC?

8.40 percent

16.00 percent

8.00 percent

7.73 percent

We can estimate a stock’s value by__________.

discounting the future dividends and future stock price appreciation

compounding the past dividends and past stock price appreciation

using the book value of the total stockholder equity section

using the book value of the total assets divided by the number of shares outstanding

When firms use multiple sources of capital, they need to calculate the appropriate discount rate for valuing their firm’s cash flows as__________.

a simple average of the capital components costs

a weighted average of the capital components costs

a sum of the capital components costs

they apply to each asset as they are purchased with their respective forms of debt or equity

Which of these is the term for portfolios with the highest return possible for each risk level?

Efficient portfolios

Optimal portfolios

Total portfolios

Modern portfolios

Which of the following can create ethical dilemmas between corporate managers and stockholders?

Auditors

Venture Capitalist

Board of directors
Agency relationship

Which of these ratios show the combined effects of liquidity, asset management, and debt management on the overall operation results of the firm?

Profitability

Financial

Liquidity

Coverage