# Question #3 (1 point) Suppose a firm’s sales increased from \$4 million in 2008 to more than \$7 million in 2012.

December 1, 2017

Question #3 (1 point)
Suppose a firm’s sales increased from \$4
million in 2008 to more than \$7 million in 2012. What has been the average
annual growth rate in sales?
13%
15%
12%
14%
Question #4 (1 point)
The expected value of a normal distribution
of prices for a stock is \$30. If you are 99% sure that the price of the stock
will be between \$20 and \$40, then what is the variance of the stock price.
\$6.08
\$26.03
\$15.08
\$36.95
Question #5 (1 point)
Assume today is January 1st. If a wealthy
relative offered to set aside an initial \$4,000 today, and then an additional
\$10,000 at the end of each year (the first being on December 31st of this year)
for the next 5 years, how much would you have in your account after 5 years if
the funds grew at 10%?
\$61,051
\$109,733
\$67,493
\$40,525
Question #6 (1 point)
Duane Corp. has taxable income of \$90,000.
What is the firm’s average tax rate? (Use Exhibit 3.6 in your text.)
22.3%
20.9%
34.0%
19.3%
Question #7 (1 point)
United States are sole proprietorships.
True
False
Question #8 (1 point)
The following data can be found on
Silverton Inc.’s 2012 balance sheet: Cash \$45,000, Marketable Securities
\$70,000, Accounts Receivable \$500,000, Inventory \$525,000, Net Plant and
Equipment \$400,000, Accounts Payable \$75,000, and Notes Payable \$350,000.
Please calculate Silverton Inc.’s Quick Ratio.
2.68
0.21
1.45
2.39
Question #9 (1 point)
Sainsbury Inc. has a beta of 0.8. If the
expected market return is 13.5% and the risk-free rate is 6%, what is the
appropriate required return of Sainsbury (using the CAPM)?
9.3%
11.1%
10.2%
12.0%
Question #10 (1 point)
The following data can be found on
Stevenson Inc.’s balance sheet: Cash of \$300,000; marketable securities of
\$120,000; accounts receivable of \$1,000,000; inventory of \$750,000; net plant
and equipment of \$900,000; and total current liabilities of \$960,000. Calculate
Jorgonson Inc.’s net working capital.
\$2,110,000
\$1,210,000
\$460,000
\$640,000
Question #11 (1 point)
In investment banking, the process by which
the investment banker helps the company sell its new security issue is called
underwriting
marketing
distribution
origination
Question #12 (1 point)
We wish to accumulate \$20,000 after 10
years. If we can secure an interest rate of 11%, how much must be set aside at
the end of each of the ten periods?
\$932
\$945
\$1196
\$1079
Question #13 (1 point)
Assume you wanted to double the amount of
money in your savings account in the next nine years. Approximately what
interest rate would you need to earn to accomplish this?
8%
10%
12%
unable
to determine based on the information provided
Question #14 (1 point)
Peter’s bank will pay him interest
compounded quarterly (4 times a year) for 36 months (3 years). If peter
deposits \$3,000 and earns an annual 4% rate of return, how much will Peter have
at the end of 36 months?
\$3,380
\$2,667
\$3,375
\$3,517
Question #15 (1 point)
Gemini Inc.’s debt increases while their
assets and return on assets remain unchanged. Gemini’s return on equity will
increase
decrease
remain
unchanged
cannot
be determined from the information provided.
Question #16 (1 point)
Which of the following is considered a
current liability?
inventories
accounts
payable
net
plant and equipment
all
of the above
Question #17 (1 point)
Bright Light Company has \$500,000 in assets
and \$200,000 of debt. They report net income of \$50,000. What is their return
on assets?
18.3%
16.7%
25.0%
10.0%
Question #18 (1 point)
Stephen wants to determine the most she
should pay to purchase an ordinary annuity. It consists of cash flows of \$1,000
at the end of each year for 10 years. He requires a minimum return of at least
10%.
\$3,245
\$6,145
\$1,800
\$9,000