8/17/18, 2:55 AMFIN 320 Sample Final Fall 2018
Page 1 of 19https://xlitemprod.pearsoncmg.com/api/v1/print/en-us/finance1.
2.
3.4.Student: _____________________Date: _____________________Instructor: Yue LiuCourse: FIN320 Dept 2018Assignment: FIN 320 Sample Final Fall2018Which of the following types of firms does NOT have limited liability?A.
corporationsB.
limited partnershipsC.
sole proprietorshipsD.
none of the aboveA C corporation earns per share before taxes. The corporate tax rate is 39%, the personal tax rate on dividends is 15%, and the personal tax rate on non-dividend income is 36%. What is the total amount of taxes paid if the company pays a dividend?$9.10$6A.
$6.23B.
$3.56C.
$5.34D.
$4.45The principal goal of a financial manager is to maximize the wealth of the stockholders.
True
FalseWhich of the following best describes why a firm produces financial statements?A.
to show the daily activities a firm has undertaken in the previous financial year, and what activities are planned for the near futureB.
to increase the intrinsic value of a firmC.
to provide a means for interested outside parties such as creditors to obtain information about a firm, with an overview of the short and longterm financial condition of a business−−D.
to use as a tool when planning future investments within a firm 8/17/18, 2:55 AMFIN 320 Sample Final Fall 2018
Page 2 of 19https://xlitemprod.pearsoncmg.com/api/v1/print/en-us/finance5.Luther CorporationConsolidated Balance SheetDecember 31, 2006 and 2005 (in $ millions)Assets20062005Liabilities andStockholders' Equity20062005Current AssetsCurrent LiabilitiesCash58.858.5Accounts payable85.873.5Accounts receivable56.639.6Notes payable /short-term debt10.59.6Inventories46.442.9Current maturities oflong-term debt3836.9Other current assets6.13.0Other current liabilities6.012.0 Total current assets167.9144.0 Total current liabilities140.3132.0LongTerm Assets−Long-Term Liabilities Land65.662.1 Long-term debt238.3168.9 Buildings108.191.5 Capital lease obligations Equipment118.399.6 Less accumulated depreciation()54.8(52.5)Deferred taxes22.822.2Net property, plant, and equipment237.2200.7Other long-term liabilities−−−−−−Goodwill60.0−− Total long-term liabilities261.1191.1Other longterm assets−63.042.0Total liabilities401.4323.1 Total longterm assets−360.2242.7Stockholders' Equity126.763.6Total Assets528.1386.7Total liabilities andStockholders' Equity528.1386.7Refer to the balance sheet above. When using the book value of equity, the debt-equity ratio for Luther in 2006 is closest to:A.
4.53B.
2.26C.
1.13D.
3.17 8/17/18, 2:55 AMFIN 320 Sample Final Fall 2018
Page 3 of 19https://xlitemprod.pearsoncmg.com/api/v1/print/en-us/finance6.Luther CorporationConsolidated Balance SheetDecember 31, 2006 and 2005 (in $ millions)Assets20062005Liabilities andStockholders' Equity20062005Current AssetsCurrent LiabilitiesCash63.858.5Accounts payable89.273.5Accounts receivable55.539.6Notes payable /shortterm debt−10.89.6Inventories44.742.9Current maturities oflong-term debt37.936.9Other current assets5.33.0Other current liabilities6.012.0 Total current assets169.3144.0 Total current liabilities143.9132.0Long-Term AssetsLongTerm Liabilities− Land66.262.1 Longterm debt−236.4168.9 Buildings107.391.5 Capital lease obligations Equipment120.599.6 Less accumulated depreciation()56.9(52.5)Deferred taxes22.822.2Net property, plant, and equipment237.1200.7Other long-term liabilities−−−−−−Goodwill60.0−− Total long-term liabilities259.2191.1Other long-term assets63.042.0Total liabilities403.1323.1 Total long-term assets360.1242.7Stockholders' Equity126.363.6Total Assets529.4386.7Total liabilities andStockholders' Equity529.4386.7Refer to the balance sheet above. Luther's quick ratio for 2006 is closest to:A.
0.87B.
1.21C.
1.73D.
1.3
Page 1 of 19https://xlitemprod.pearsoncmg.com/api/v1/print/en-us/finance1.
2.
3.4.Student: _____________________Date: _____________________Instructor: Yue LiuCourse: FIN320 Dept 2018Assignment: FIN 320 Sample Final Fall2018Which of the following types of firms does NOT have limited liability?A.
corporationsB.
limited partnershipsC.
sole proprietorshipsD.
none of the aboveA C corporation earns per share before taxes. The corporate tax rate is 39%, the personal tax rate on dividends is 15%, and the personal tax rate on non-dividend income is 36%. What is the total amount of taxes paid if the company pays a dividend?$9.10$6A.
$6.23B.
$3.56C.
$5.34D.
$4.45The principal goal of a financial manager is to maximize the wealth of the stockholders.
True
FalseWhich of the following best describes why a firm produces financial statements?A.
to show the daily activities a firm has undertaken in the previous financial year, and what activities are planned for the near futureB.
to increase the intrinsic value of a firmC.
to provide a means for interested outside parties such as creditors to obtain information about a firm, with an overview of the short and longterm financial condition of a business−−D.
to use as a tool when planning future investments within a firm 8/17/18, 2:55 AMFIN 320 Sample Final Fall 2018
Page 2 of 19https://xlitemprod.pearsoncmg.com/api/v1/print/en-us/finance5.Luther CorporationConsolidated Balance SheetDecember 31, 2006 and 2005 (in $ millions)Assets20062005Liabilities andStockholders' Equity20062005Current AssetsCurrent LiabilitiesCash58.858.5Accounts payable85.873.5Accounts receivable56.639.6Notes payable /short-term debt10.59.6Inventories46.442.9Current maturities oflong-term debt3836.9Other current assets6.13.0Other current liabilities6.012.0 Total current assets167.9144.0 Total current liabilities140.3132.0LongTerm Assets−Long-Term Liabilities Land65.662.1 Long-term debt238.3168.9 Buildings108.191.5 Capital lease obligations Equipment118.399.6 Less accumulated depreciation()54.8(52.5)Deferred taxes22.822.2Net property, plant, and equipment237.2200.7Other long-term liabilities−−−−−−Goodwill60.0−− Total long-term liabilities261.1191.1Other longterm assets−63.042.0Total liabilities401.4323.1 Total longterm assets−360.2242.7Stockholders' Equity126.763.6Total Assets528.1386.7Total liabilities andStockholders' Equity528.1386.7Refer to the balance sheet above. When using the book value of equity, the debt-equity ratio for Luther in 2006 is closest to:A.
4.53B.
2.26C.
1.13D.
3.17 8/17/18, 2:55 AMFIN 320 Sample Final Fall 2018
Page 3 of 19https://xlitemprod.pearsoncmg.com/api/v1/print/en-us/finance6.Luther CorporationConsolidated Balance SheetDecember 31, 2006 and 2005 (in $ millions)Assets20062005Liabilities andStockholders' Equity20062005Current AssetsCurrent LiabilitiesCash63.858.5Accounts payable89.273.5Accounts receivable55.539.6Notes payable /shortterm debt−10.89.6Inventories44.742.9Current maturities oflong-term debt37.936.9Other current assets5.33.0Other current liabilities6.012.0 Total current assets169.3144.0 Total current liabilities143.9132.0Long-Term AssetsLongTerm Liabilities− Land66.262.1 Longterm debt−236.4168.9 Buildings107.391.5 Capital lease obligations Equipment120.599.6 Less accumulated depreciation()56.9(52.5)Deferred taxes22.822.2Net property, plant, and equipment237.1200.7Other long-term liabilities−−−−−−Goodwill60.0−− Total long-term liabilities259.2191.1Other long-term assets63.042.0Total liabilities403.1323.1 Total long-term assets360.1242.7Stockholders' Equity126.363.6Total Assets529.4386.7Total liabilities andStockholders' Equity529.4386.7Refer to the balance sheet above. Luther's quick ratio for 2006 is closest to:A.
0.87B.
1.21C.
1.73D.
1.3
