Principles of Managerial Finance by Gitman (12th Edition)

Principles of Managerial Finance by Gitman 12th Edition

1. __________ is the part of finance concerned with the design and delivery of advice and financial products to clients.

Ans: Financial Planning


2. Which of the following is least likely to report to the Controller?

Ans: Cash manager


3. Which of the following statements is correct about the typical corporate organizational chart?

Ans: The Credit Manager reports to the Treasurer.


4. Corporations are owned by:

Ans: Stockholders.


5. Strengths of the __________ form of business ownership include the owner receiving all profits, low organizational costs and ease of dissolution, and having income included on the owner's personal tax return.

Ans: Sole proprietorship


6. Springfield Medical Devices has taxable income of $180,000, what is its federal tax?

Ans: $53,450

[$22,250 + .39 ($180,000 - $100,000)]

[$22,250 + .39 ($180,000 - $100,000)]


7. Springfield Medical Devices, Inc., has a current assets valued at $15 million, inventory at $12 million, and current liabilities valued at $6 million. The cost of goods sold was $60 million. Based on this information, its current ratio is:

Ans: 2.5

(15/6)


8. Springfield Medical Devices, Inc., has earnings before interest and taxes of $500,000, lease payments of $200,000, dividend payments of $75,000, and interest expenses of $150,000. The company has not made principal payments back to its shareholders during the past year and there are not preferred shareholders. What is its fixed-payment coverage ratio?

Ans: 2.00

[($500,000 + 200,000) / (150,000 + 200,000)]

[($500,000 + 200,000) / (150,000 + 200,000)]


9. Newport Printing has a minimum cash balance of $250,000 and a cash balance at the beginning of October of $300,000. If cash receipts are forecast to be $165,000 and disbursements are $290,000 during the month, how much additional financing is anticipated?

Ans: $75,000

10. What is the required rate of return for a security with a beta of 1.25, when the market portfolio is expected to provide a nine percent rate of return and the risk-free rate is three percent?

Ans: 10.5%


If you face this kinds of problem you can find out the solution from this book. this is the best ever finance book that is very easy to understand.

Book Title : Principles of Managerial Finance (12th Edition)
Author : Lawrence J. Gitman
Publisher : Addison Wesley

File Size: 45.29 MB

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