QRB 501 Final Exam

Question no1

One disadvantage of the corporate form of business ownership is the

Question no 2

which one of the following statements is false?

Question no 3

A firm has a debt-equity ratio of .64, a pretax cost of debt of 8.5 percent, and a required return on assets of 12.6 percent. What is the cost of equity if you ignore taxes?

Question no 4

Which one of these statements is correct concerning the cash cycle?

Question no 5

You plan to invest $6,500 for three years at 4 percent simple interest. What will your investment be worth at the end of the three years?

Question no 6

Which one of the following statements about preferred stock is true?

Question no 7

A firm has a total debt ratio of .47. This means the firm has 47 cents in debt for every:

Question no 8

The costs of avoiding a bankruptcy filing by a financial distress firm are classified as ______ costs.

Question no 9

All else held constant, interest rate risk will increase when the time to maturity:

Question no 10

What is the present value of $6,811 to be received in one year if the discount rate is 6.5 percent?

Question no 11

All else equal, the contribution margin must increase as qrb 501 final exam

Question no 12

The process of planning and managing a firm’s long-term assets is …..:

Question no 13

Book value

Question no 14

The cash flow resulting from a firm’s ongoing, normal business activities is refer to as the:

Question no 15

The underlying assumption of the dividend growth model is that a stock is worth?

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Question no 16

Under the ____ method, the underwriter buys the securities for less than the offering price and accepts the risk of not selling the issue, while under the _____ method, the underwriter does not purchase the shares but merely acts as an agent.

Question no 17

Do futures contracts contrast with forwarding contracts by?

Question no 18

Lois is purchasing an annuity that will pay $5,000 annually for 20 years, with the first annuity payment made on the date of purchase. What is the value of the annuity on the purchase date ….a discount rate of 7 percent?

Question no 19

Which one of the following is an example of a non diversifiable risk?

Question no 20

An interest rate that is compounded monthly but is express as if the rate were compounded annually, is _____ rate.

Question no 21

The market price of a bond increases when the:

Question no 22

The higher the inventory turnover, the:

Question no 23

Which one of these is the correct definition?

Question no 24

Which term defines the tax rate that applies to the next dollar of taxable income?

Question no 25

An efficient capital market is one in which?

Question no 26

Ratios that measure a firm’s ability to pay its bills over the short run without undue stress are?

Question no 27

A project has an initial cost of $2.50. The cash inflows are $0, $500, $900, and $700 for years 1 to 4, respectively.What is the payback period?

Question no 28

The excess return you earn by moving from a relatively risk-free investment to a risky investment is …….:

Question no 29

The primary goal of financial management is to:

Question no 30

The discount rate that makes the net present value of investment exactly equal to zero is called the: