FIN3300 Final Exam with 100% Correct Answers
1. The primary goal of a publicly-owned firm interested in serving its stockholders should be to
.
a. maximize the shareholder wealth
b. maximize expected total corporate profit
c. maximize expected EPS
d. minimize the chances of losses
e. maximize expected net income
2. Jessica is examining data for Gamma, Inc. She sees that Gamma has EBIT (operating profit) of
$2,000,000. She knows that Gamma paid $400,000 in interest. If Gamma has a corporate tax rate
of 34% and if Gamma has 100,000 common shares outstanding, Jessica will calculate Gamma’s
net income as $ .
a. 1,024,000
b. 1,040,000
c. 1,056,000
d. 1,072,000
e. 1,090,000
, Use the following for 3-10.
Income Statement
2013 2014
Sales
COGS
Gross profit
Oper. exp
Depreciation
Operating profit
Interest exp. 5,
EBT
Taxes
Net Income
Balance Sheet
2013 2014
Cash 450,000 499,000
Accounts rec 275,000 250,000
Inventories 280,000 325,000
Current Assets 1,005,000 1,074,000
Net fixed assets 1,125,000 ???
Total Assets 2,130,000 2,304,000
Notes payable 150,000 125,000
Accounts payable 90,000 115,000
Accruals 15,000 25,000
Current Liabilities 255,000 265,000
Long‐term debt 1,000,000 1,050,000
Common stock @ ($0.25 par) 25,000 29,000
Additional paid in capital 500,000 580,000
Retained earnings 350,000 380,000
Total Liabilities & Equity 2,130,000 2,304,000
3. Net fixed assets in 2014 were $ .
a. 1,230,000
b. 1,235,000
c. 1,240,000
d. 1,245,000
e. 1,250,000
4. COGS on the 2013 common-sized income statement was 24%. Therefore, COGS in 2013
was $ .
, a. 115,000
b. 120,000
c. 125,000
d. 130,000
e. 135,000
1. The primary goal of a publicly-owned firm interested in serving its stockholders should be to
.
a. maximize the shareholder wealth
b. maximize expected total corporate profit
c. maximize expected EPS
d. minimize the chances of losses
e. maximize expected net income
2. Jessica is examining data for Gamma, Inc. She sees that Gamma has EBIT (operating profit) of
$2,000,000. She knows that Gamma paid $400,000 in interest. If Gamma has a corporate tax rate
of 34% and if Gamma has 100,000 common shares outstanding, Jessica will calculate Gamma’s
net income as $ .
a. 1,024,000
b. 1,040,000
c. 1,056,000
d. 1,072,000
e. 1,090,000
, Use the following for 3-10.
Income Statement
2013 2014
Sales
COGS
Gross profit
Oper. exp
Depreciation
Operating profit
Interest exp. 5,
EBT
Taxes
Net Income
Balance Sheet
2013 2014
Cash 450,000 499,000
Accounts rec 275,000 250,000
Inventories 280,000 325,000
Current Assets 1,005,000 1,074,000
Net fixed assets 1,125,000 ???
Total Assets 2,130,000 2,304,000
Notes payable 150,000 125,000
Accounts payable 90,000 115,000
Accruals 15,000 25,000
Current Liabilities 255,000 265,000
Long‐term debt 1,000,000 1,050,000
Common stock @ ($0.25 par) 25,000 29,000
Additional paid in capital 500,000 580,000
Retained earnings 350,000 380,000
Total Liabilities & Equity 2,130,000 2,304,000
3. Net fixed assets in 2014 were $ .
a. 1,230,000
b. 1,235,000
c. 1,240,000
d. 1,245,000
e. 1,250,000
4. COGS on the 2013 common-sized income statement was 24%. Therefore, COGS in 2013
was $ .
, a. 115,000
b. 120,000
c. 125,000
d. 130,000
e. 135,000
