davenport finc620 week 3 quiz latest 2105

| June 4, 2016

Question
Question 1

2 out of 2 points

Which of the following statements is CORRECT?

Question 2

2 out of 2 points

Chua Chang & Wu Inc. is planning its operations for next year, and the CEO wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year?

Last year’s sales = S0

$200,000

Last year’s accounts payable

$50,000

Sales growth rate = g

40%

Last year’s notes payable

$15,000

Last year’s total assets = A0*

$135,000

Last year’s accruals

$20,000

Last year’s profit margin = PM

20.0%

Target payout ratio

25.0%

Question 3

2 out of 2 points

The capital intensity ratio is generally defined as follows:

Question 4

2 out of 2 points

Last year Godinho Corp. had $250 million of sales, and it had $75 million of fixed assets that were being operated at 80% of capacity. In millions, how large could sales have been if the company had operated at full capacity?

Question 5

2 out of 2 points

Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past to 50%, which the firm’s investment bankers have recommended. Based on the AFN equation, by how much would the AFN for the coming year change if HHW increased the payout from 10% to the new and higher level? All dollars are in millions.

Last year’s sales = S0

$300.0

Last year’s accounts payable

$50.0

Sales growth rate = g

40%

Last year’s notes payable

$15.0

Last year’s total assets = A0*

$500.0

Last year’s accruals

$20.0

Last year’s profit margin = PM

20.0%

Initial payout ratio

10.0%

Question 6

2 out of 2 points

Clayton Industries is planning its operations for next year, and Ronnie Clayton, the CEO, wants you to forecast the firm’s additional funds needed (AFN). The firm is operating at full capacity. Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Dollars are in millions.

Last year’s sales = S0

$350

Last year’s accounts payable

$40

Sales growth rate = g

30%

Last year’s notes payable

$50

Last year’s total assets = A0*

$500

Last year’s accruals

$30

Last year’s profit margin = PM

5%

Target payout ratio

60%

Question 7

2 out of 2 points

Which of the following statements is CORRECT?

Question 8

2 out of 2 points

Jefferson City Computers has developed a forecasting model to estimate its AFN for the upcoming year. All else being equal, which of the following factors is most likely to lead to an increase of the additional funds needed (AFN)?

Question 9

2 out of 2 points

Which of the following assumptions is embodied in the AFN equation?

Question 10

2 out of 2 points

Last year Emery Industries had $450 million of sales and $225 million of fixed assets, so its FA/Sales ratio was 50%. However, its fixed assets were used at only 65% of capacity. If the company had been able to sell off enough of its fixed assets at book value so that it was operating at full capacity, with sales held constant at $450 million, how much cash (in millions) would it have generated?

Question 11

2 out of 2 points

Which of the following statements is CORRECT?

Question 12

2 out of 2 points

Which of the following statements is CORRECT?

Question 13

2 out of 2 points

A company expects sales to increase during the coming year, and it is using the AFN equation to forecast the additional capital that it must raise. Which of the following conditions would cause the AFN to increase?

.

Question 14

2 out of 2 points

Which of the following is NOT a key element in strategic planning as it is described in the text?

Question 15

2 out of 2 points

Which of the following is NOT one of the steps taken in the financial planning process?

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