Order Managerial Accounting Exam Answers | Custom Writing

By February 19, 2018Academic Papers

CLASS / COURSE: Managerial Accounting

QUESTION DESCRIPTION: 

Please see attached file for all questions in proper format. 

1. (TCO 1) What is the goal of financial management for a sole proprietorship? (Points : 3)
decrease long-term debt to reduce the risk to the owner
maximize net income given the resources of the firm
maximize the market value of the equity
minimize the tax impact on the proprietor
minimize costs and increase production
2. (TCO 1) When analyzing alternative capital structures for a firm, a financial manager must
consider which of the following? (Points : 3)
type of loan
amount of funds needed
cost of funds
mix of debt and equity
all of the above
3. (TCO 1) Market value is important to the financial manager because: (Points : 3)
It reflects the value of the asset, based on generally-accepted accounting principles.
Is a crucial component of the balance sheet, and can impact the financial statements.
Market value reflects the amount someone is willing to pay today for an asset.
The market value of an asset reflects its historical cost.
None of the above
4. (TCO 1) Which of the following is true regarding income statements? (Points : 3)
It reveals the net cash flows of a firm over a stated period of time.
It reflects the financial position of a firm as of a particular date.
It records revenue only when cash is received for the product or service provided.
It records expenses based on the recognition principle.
None of the above is a true statement.
5. (TCO 1) Tato’s Pizza has sales of $625,000. They paid $43,000 in interest during the year and
depreciation was $79,000. Administrative costs were $100,000 and other costs were $160,000.
Assuming a tax rate of 35 percent, what is Tato’s Pizza net income?
(Points : 3)
$157,950
$322,000
$243,000
$200,000
6. (TCO 1) Home Best Hardware had $315,000 in taxable income last year. Using the tax rates
provided in Table 2.3, what are the company’s income taxes? (Points : 3)
$122,850
$106,100
$94,500
None of the above
7. (TCO 1) Pizza A had earnings after taxes of $390,000 in the year 2008, and 300,000 shares
outstanding. In year 2009, earnings after taxes increased by 20 percent to $468,000 and 25,000
new shares were issued for a total of 325,000 shares. What is the EPS figure for 2009? (Points : 3)
$1.30
$1.44
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$0.77
$0.69
8. (TCO 1) The income statement reflects: (Points : 3)
income and expenses at the time when those items affect the cash flows of a firm.
income and expenses in accordance with GAAP.
the cash flows in accordance with GAAP.
the flow of cash into and out of a firm during a stated period of time.
the flow of cash into and out of a firm as of a particular date.
9. (TCO 1) Green Leaf Nursery has EBIT of $250,000, interest of $30,000, taxes of $50,000, and
depreciation of $80,000. What is the company’s operating cash flow? (Points : 3)
$297,200
$280,000
$340,000
$270,000
$250,000
10. (TCO 3) Mark deposited $1,000 today, in an account that pays eight percent interest,
compounded semi-annually. Which one of the following statements is correct concerning this
investment? (Points : 3)
Mark will earn more interest in year 4 than he will in year 3.
Mark will receive equal interest payments every six months over the life of the investment.
Mark would have earned more interest if he had invested in an account paying 8
percent simple interest.
Mark would have earned more interest if he had invested in an account paying annual
interest.
Mark will earn less and less interest each year over the life of the investment.
11. (TCO 3) Mr. Smith will receive $8,500 a year for the next 14 years from a contract. If the
interest rate on this investment is eight percent, what is the approximate current value of these
future payments? (Points : 3)
$70,070
$53,500
$110,200
$96,700
12. (TCO 3) Your neighbor just received a credit offer in an e-mail. The company is offering him
$6,000 at 12.8 percent interest. The monthly payment is only $110. If he accepts this offer, how
long will it take him to pay off the loan? (Points : 3)
81.00 months
81.50 months
83 months
82.17 months
90.70 months
13. (TCO 3) Fine Oak Woodworks is considering a project that has cash flows of $6,000, $4,000,
and $3,000 for the next three years. If the appropriate discount rate of this project is 10 percent,
which of the following statements is false? (Points : 3)
The current value of the project’s inflows is $13,000
The approximate current value of the project’s inflows is $11,000
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The project’s inflows are higher than zero
The project should be accepted because its present value is positive
14. (TCO 4) You are considering an investment that will have the following cash flows: $54,000,
$66,000, $(60,000), $57,000, and $120,000. The appropriate discount rate is 11 percent. What is
the value of this investment? Note that the cash flow in brackets is negative. (Points : 3)
$160,000
$167,106
$162,500
Cannot be determined because one of the cash flows is negative
15. (TCO 3) North Bank offers you an APR of 9.76 percent compounded semiannually, and South
Bank offers you an effective rate of 9 percent on a business loan. Which bank should you choose
and why? (Points : 3)
South Bank because its effective rate is higher.
North Bank because the APR is lower.
South Bank because its effective rate is lower.
North Bank because its effective rate is lower.
1. (TCO 3) Given an interest rate of zero percent, the future value of a lump sum invested today will
always: (Points : 3)
remain constant, regardless of the investment time period.
decrease if the investment time period is shortened.
decrease if the investment time period is lengthened.
be equal to $0.
be greater than the initial investment amount.
2. (TCO 3) Which one of the following is an example of an annuity, but not a perpetuity? (Points :
3)
unequal payments each month, for 18 months
payments of equal amount each quarter forever
unequal payments each year forever
equal payments every six months for 48 months
unending equal payments every other month
3. (TCO 3) Fanta Cola has $1,000 par value bonds outstanding at 12 percent interest. The bonds
mature in 25 years. What is the current price of the bond if the YTM is 11 percent? Assume
annual payments. (Points : 3)
$1080
$1085
$925
$1000
4. (TCO 6 and 8) A bond’s indenture agreement will include which of the following? (Points : 3)
description of any loan collateral
call provisions
total amount of the bond issue
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protective covenants
all of the above
none of the above
5. (TCO 3) Bonds issued by Blue Sky Airlines have a face value of $1,000 and currently sell for
$1,180. The annual coupon payments are $125. If the bonds have 20 years until maturity, what
is the approximate YTM of the bonds? (Points : 3)
10.50%
11.50%
11.75%
12%
6. (TCO 3) Bean Coffee issued preferred stock many years ago. It carries a dividend of $8 per
share, fixed. As time has passed, yields have decreased from the original eight percent (at the
time of issuance) to six percent. What was the current price of the stock? Hint: Yield is the same
as required rate of return. (Points : 3)
$100
$133
$102
$86.40
None of the above
7. (TCO 3) Intelligence Research, Inc. will pay a common stock dividend of $1.60 at the end of
the year. The required rate of return by common stockholders is 13 percent. The firm has a
constant growth rate of nine percent. What is the current price of the stock? (Points : 3)
$35
$40
$27
$29
8. (TCO 3) Royal Electric paid a $4 dividend last year. The dividend is expected to grow at a
constant rate of six percent over the next four years. Common stockholders require a 13
percent return. What are the values of the dividends for years 1, 2 and 3, respectively? (Points :
3)
$4, $4.5 and $4.8
$4.24, $4.76 and $5.05
$4.24, $4.49, $4.76
$4, $4.50, $5.05
9. (TCO 6) The market where one shareholder sells shares to another shareholder is called the
_____ market. (Points : 3)
primary
main
secondary
principal
dealer
10. (TCO 6) The smallest firms listed on NASDAQ are in the NASDAQ _____ Market. (Points : 3)
National
Capital
Regional
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Global Select
Global
11. (TCO 6) The maturity date of a bond is defined as: (Points : 3)
the first date on which a bond can be called.
the date on which the principal amount is paid.
20 years after the issue date.
the date on which the next interest payment will be made.
the original issue date.
12. (TCO 6) Star Industries has one outstanding bond issue. An indenture provision prohibits the
firm from redeeming the bonds during the first two years. This provision is referred to as a _____
provision. (Points : 3)
deferred call
market
liquidity
debenture
sinking fund
13. (TCO 8) Which of the following is true regarding bonds? (Points : 3)
Bonds do not carry default risk.
Bonds are not sensitive to changes in the interest rates.
Moody’s and Standard and Poor’s provide information regarding a bond’s interest rate risk.
Municipal bonds are not free of default risk.
None of the above is true
14. (TCO 6) Which of the following best describes a zero-coupon bond? (Points : 3)
A bond that adjusts the coupon payments based on an interest rate index, such as the Tbill.
A bond that is issued by the U.S. government.
A bond that adjusts the coupon payment date.
A bond that has no coupons and pays a face value at maturity.
An EE Savings Bond
15. (TCO 6) Which of the following is true regarding convertible bonds? Select all that apply: (Points : 3)
Are relatively common
Can be exchanged for a fixed number of shares at maturity only
Can be exchanged for a fixed number of shares before maturity
Allow the holder to require the issuer to buy the bond back
1. (TCO 1) Paul is the owner of Paul’s Cabinets, which is a sole proprietorship. The firm cannot pay
its bills because a large customer defaulted on payment. Which one of the following statements is
correct given this situation? (Points : 3)
The creditors of Paul’s Cabinets can only collect payment if Paul’s Cabinets receives
payment from its customer.
The only course of action the creditors of Paul’s Cabinets has is to sell the assets of Paul’s
Cabinets.
The creditors of Paul’s Cabinets can assume the assets of Paul’s Cabinets, but only in an
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amount that exceeds Paul’s investment in the firm.
Paul is personally liable for the entire debt of Paul’s Cabinets.
Paul is personally liable for the firm’s debts, but only to the extent of his investment in
Paul’s Cabinets.
2. (TCO 1) Trademarks are classified as: (Points : 3)
short-term assets.
current liabilities.
long-term debt.
tangible fixed assets.
intangible fixed assets.
3. (TCO 1) Can you provide some examples of recent, well-known unethical behavior cases?
Explain the situation in one or two sentences. (Points : 8)
4. (TCO 3) Why does money have time value? Explain your rationale. (Points : 8)
5. (TCO 8) Are U.S. Treasury securities risk-free? Why or why not? Explain your rationale? (Points :
8)
6. (TCO 6) What are some of the features of zero-coupon bonds that make them attractive to
certain investors? Which type of investors will be most interested in these bonds?
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SOLUTION DESCRIPTION: Completed Solution is attached. Click on Buy button and then download file to get full solution. 

SUBJECTS / CATEGORIES: 
1. Finance
2. Financial Management
3. Accounting

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