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%
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Book Title : Principles of Managerial Finance (12th Edition)
Author : Lawrence J. Gitman
Publisher : Addison Wesley
File Size: 45.29 MB
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