WorksheetsQuiz Chp 12,13 & 15 FinMan
Total questions: 30
Worksheet time: 15mins
Under a court-supervised corporate reorganization plan, the business may be run by ...
a court-appointed trustee
current managers
a court-appointed trustee and current managers
None of the above
Bacon Signs Inc. has planned a 3-month issue of commercial paper with a face value of $15,000,000. The paper is set to sell at 99.5% of face value. What is the discounted selling price of the firm's commercial paper?
$14,925,000
$14,995,000
$15,000,000
$15,300,000
Commercial paper and banker's acceptances are two forms of corporate financing typically undertaken by ...
start-up firms
mature firms
sole proprietorships
All of the above
New York Investments (NYI), an investment banking firm, has proposed two types of payment plans for the IPO being considered by Albany Exploration. The first is a firm commitment of $40,000,000. The second is a best efforts arrangement in which NYI will receive $2.00 for every share sold up to a maximum of $3,600,000 for the 1,800,000 shares being offered. How much money will NYI earn under the best efforts method if it is able to sell only 95% of the offering at a price of $25.00 per share?
$3,420,000
$3,600,000
$3,200,000
$2,800,000
The process for selling stock for the very first time is known as ...
an initial public offering
a primary market
first refusal rights
a rookie offering
Hopewell Drugstore plans to sell 50,000 bonds each with a face value of $1,000. If all of the bonds eventually sell for $975 each and the firm's investment banker receives a commission of 1.50% for every bond sold, what are the net proceeds to the firm from the sale of the bond issue?
$48,018,750
$43,415,250
$41,500,000
$40,875,750
The bond indenture contains ALL BUT WHICH of the following?
The coupon rate
The yield-to-maturity
The maturity date
The par value
Pacific Automotive has a $250,000 compensating balance loan with its bank. The terms of the loan call for Pacific to keep 10% of the loan as a compensating balance and pay interest at an annual rate of 6.50% on the entire amount. If the firm borrows the maximum amount for one year, how much interest is due at the end of the year?
$14,625
$16,250
$22,500
$25,000
Your bank grants you a lump sum loan today equal to the face value of the loan less the interest. Further you must repay the face value of the loan amount in a single lump sum at the end of one year. These terms most closely resemble which of the following types of bank loan?
Straight loan with a pre-set payment schedule
Compensating balance loan
Line of credit
Discount loan
Starting a business with ... is by far the most common start-up financing
bonds and equity
personal and family funds
bank loans
venture capital
In the life cycle of a business, a stable life cycle stage is most closely identified with ...
old age
youth
maturity
infancy
Of the following items, which would be considered working capital as opposed to a capital asset?
Disposable parts that aid in installation and are shipped with each sale
A CAD/CAM machine used in the manufacturing process
An addition to the existing building designed to facilitate a new product line
None of the above are working capital assets
Which of the following is NOT an inventory management technique?
ABC
6 SIGMA
JIT
EOQ
Warehouse Sports, a large box store retailer of athletic shoes, orders 200,000 shoes per year from its manufacturer. If Warehouse Sports orders 10,000 shoes in each order, and spends $10,000 in total annual ordering costs, what is the cost of ordering and delivery per order?
$2,000
$500
$50
There is not enough information to answer this question
Float, from the buyer's perspective, is called ... float and from the seller's perspective, is called ... float
financing; crediting
disbursement; collection
crediting; financing
collection; disbursement
When a company deals only in cash, the cash conversion cycle becomes ...
the collection cycle
the payable cycle
the production cycle
the collection cycle - the payable cycle
Travel and Tow Trailers Inc. makes small trailers for light-duty towing behind SUVs and small pickup trucks. Its trailers typically sell for $2,500. Many of its customers have asked for credit terms to aid in purchasing the trailers. The firm's finance department has estimated the following profile for its light-duty trailers and customer base:
Annual sales: 10,000 trailers
Annual production costs per trailer: $1,500
Lost sales if credit is not provided for customers: 2,000 trailers
Default rate if all customers purchase on credit: 3.00%
What is the profit if the firm has a cash-only policy?
$9,250,000
$25,000,000
$8,000,000
$15,000,000
Managing the relationship between current assets and current liabilities of the firm in order to improve the flow of funds is called ...
the business operating cycle
the cash conversion cycle
working capital management
the production cycle
Using the information provided, what is the inventory turnover for the firm?
Perfect Purchase Electronics
Selected Income Statement Items, 2014
Cash Sales $1,500,000
Credit Sales $7,500,000
Total Sales $9,000,000
COGS $6,000,000
Perfect Purchase Electronics
Selected Balance Sheet Accounts
12/31/2014 12/31/2013 Change
Accounts Receivable $270,000 $240,000 $30,000
Inventory $125,000 $100,000 $25,000
Accounts Payable $110,000 $90,000 $20,000
23.53 times
53.33 times
48.00 times
60.00 times
An adjustment in the pro forma statement may be necessary for ... expenses in line with known changes to these expenses that may not correspond directly with sales or production
cash
credit
selling, general, and administrative
cash and credit
Firm A cash sales for the month are $200,000 and its accounts receivable payments for the month are $100,000. What is its total incoming cash flow for the month if its beginning cash for the month is $50,000 and there are no other cash inflows for the month?
$100,000
$150,000
$300,000
$350,000
Excess cash is an asset that has a/an ... due to lost earning power for the company
opportunity cost
cash cost
sunk cost
erosion cost
The timing and the amount of cash flow is important to the financial manager and estimating these cash outflows is part of the ... process
income forecasting
revenue forecasting
cash forecasting
cost forecasting
Northwest Packing Inc. estimates the following expenditures: total shipping costs of $1,100; wages paid to workers of $9,600; overhead costs of $4,300; raw materials of $5,000; and, dividends and interest paid of $2,200. What is the total production cost from all of these costs?
$22,200
$21,100
$20,100
$20,000
Cash disbursements or ... are closely tied to the sales forecast as the sales forecasts are typically used for scheduling production
expenditures
receipts
revenues
sales
The sales for October, November and December are $10,000, $12,000 and $18,000, respectively. For any particular month of sales, the following percentages are received over time in cash: 20% in cash from that same month of sales; 50% in cash from the previous month's sales; and, 30% in cash from the sales from two months ago. What amount of cash will be received during December?
$12,600
$12,000
$9,600
$9,000
We start the process of building a cash forecast with predicting the cash inflow from future sales. This is called ...
a sales forecast
a cash forecast
a monetary forecast
an expense forecast
For April, Anderson Antiques will have cash receipts of $365,000 and cash disbursements of $370,000. If its beginning cash is $4,000 and its desired reserve is $3,000, what will be its shortfall in cash for the month?
There is no shortfall in cash but an excess of cash
-$3,000
-$4,000
-$5,000
There are two primary tools used to forecast and set in action a company plan. Which of the tools below is one of these?
Statements of retained earnings
Profit budgets
Income statements
Pro forma statements
One of the functions of a finance manager is ...
to forecast for the coming period
to forecast for the present period
to forecast for the past period
to forecast for the present and future periods
