FINA 3770 EXAM 2 NEWEST 2025 EXAM COMPLETE QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY
GRADED A+||BRAND NEW!!
.a comp with a current ratio higher than industry avg must also have quick ratio
higher than industry avg bc both ratios measure liquidity /ANSWER/.false
.a return of 12% compounded annually is the same as a return of 1% per month.
/ANSWER/.false
.all of the following will improve a firm's liquidity position EXCEPT...
/ANSWER/.increase the avg collection period
.an investment is expected to yield $300 in 3 yrs, $500 in 5 yrs, and $300 in 7 yrs.
what is the PV of this investment if our opportunity rate is 5%?
/ANSWER/.NPV=5% use CF function on calc
$864
.assuming two investments have equal lives, a high discount rate tends to favor..
/ANSWER/.the investment with large cash flow early
.at what rate must $287.50 be compounded annually for it to grow to $650.01 in
14 yrs? /ANSWER/.6%
, .Baker Corp. is required by a debt agreement to maintain a current ratio of at
least 2.5, and Baker's current ratio now is 3. Baker wants to purchase additional
inventory with short-term debt. How much inventory can Baker purchase without
violating its debt agreement if their total current assets equal $15 million?
/ANSWER/.$1.67 million
.based on the information, and assuming the company's stock price is $30/share,
the P/E ratio is... /ANSWER/.E= 2730000(aka net income)/1000000= 2.73
30/2.73=10.49 aka closest answer = 10.99
.based on the information, the accounts receivable turnover is... /ANSWER/.credit
sales(10,000,000)/accts receivable(900,000)=
11.11
.based on the information, the acid-test ratio is... /ANSWER/.(cash(600,000) + acct
receivable(900,000))/ current liabilities(1,550,000) = 1.02
JUST REMEMBER 1.02!!!
.based on the information, the avg collection period is... /ANSWER/.acct
receivable(900,000)/[annual credit sales(10,000,000)/365] = 32.85 days
.based on the information, the current ratio is... /ANSWER/.current
assets(3,075,000)/current liabilities(1,550,000) = 1.98
.based on the information, the debt ratio is... /ANSWER/.total debt(?)/total assets
(9,000,000)= 45%
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY
GRADED A+||BRAND NEW!!
.a comp with a current ratio higher than industry avg must also have quick ratio
higher than industry avg bc both ratios measure liquidity /ANSWER/.false
.a return of 12% compounded annually is the same as a return of 1% per month.
/ANSWER/.false
.all of the following will improve a firm's liquidity position EXCEPT...
/ANSWER/.increase the avg collection period
.an investment is expected to yield $300 in 3 yrs, $500 in 5 yrs, and $300 in 7 yrs.
what is the PV of this investment if our opportunity rate is 5%?
/ANSWER/.NPV=5% use CF function on calc
$864
.assuming two investments have equal lives, a high discount rate tends to favor..
/ANSWER/.the investment with large cash flow early
.at what rate must $287.50 be compounded annually for it to grow to $650.01 in
14 yrs? /ANSWER/.6%
, .Baker Corp. is required by a debt agreement to maintain a current ratio of at
least 2.5, and Baker's current ratio now is 3. Baker wants to purchase additional
inventory with short-term debt. How much inventory can Baker purchase without
violating its debt agreement if their total current assets equal $15 million?
/ANSWER/.$1.67 million
.based on the information, and assuming the company's stock price is $30/share,
the P/E ratio is... /ANSWER/.E= 2730000(aka net income)/1000000= 2.73
30/2.73=10.49 aka closest answer = 10.99
.based on the information, the accounts receivable turnover is... /ANSWER/.credit
sales(10,000,000)/accts receivable(900,000)=
11.11
.based on the information, the acid-test ratio is... /ANSWER/.(cash(600,000) + acct
receivable(900,000))/ current liabilities(1,550,000) = 1.02
JUST REMEMBER 1.02!!!
.based on the information, the avg collection period is... /ANSWER/.acct
receivable(900,000)/[annual credit sales(10,000,000)/365] = 32.85 days
.based on the information, the current ratio is... /ANSWER/.current
assets(3,075,000)/current liabilities(1,550,000) = 1.98
.based on the information, the debt ratio is... /ANSWER/.total debt(?)/total assets
(9,000,000)= 45%
