Studentehelp : STR 581 Capstone Final Exam Part Two

STR 581 Capstone Final Examination, Part Two

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1. Internal reports that review the actual impact of decisions are prepared by:

the controller department heads factory workers management accountants

2. Horizontal analysis is also known as:

trend analysisvertical analysis linear analysis common size analysis

3. Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?

most common form of organizationreduced legal liability for investors lower taxes harder to transfer ownership

4. Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)

32% 16% 12% 40%

5. External financing needed: Jockey Company has total assets worth $4,417,665. At year-end it will have net income of $2,771,342 and pay out 60 percent as dividends. If the firm wants no external financing, what is the growth rate it can support?

30.3%27.3%32.9%25.1%

6. An unrealistic budget is more likely to result when it:

has been developed by all levels of management. has been developed in a top down fashion. has been developed in a bottom up fashion.is developed with performance appraisal usages in mind.

7. Which of the following financial statements is concerned with the company at a point in time?

balance sheet retained earnings statement statement of cash flowsincome statement

8. Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in each of the following three years. If their required rate of return if 14 percent, what is the present value of their dividends over the next four years?

$12.50 $11.63 $9.72 $13.50

9. An activity that has a direct cause-effect relationship with the resources consumed is a(n):

product activity cost driver cost pool overhead rate

10. The major element in budgetary control is:

the approval of the budget by the stockholders the valuation of inventories the preparation of long-term plans the comparison of actual results with planned objectives.

11. Tule Time Comics is considering a new show that will generate annual cash flows of $100,000 into the infinite future. If the initial outlay for such a production is $1,500,000 and the appropriate discount rate is 6 percent for the cash flows, then what is the profitability index for the project?

0.11 1.11 0.90 1.90

12. How firms estimate their cost of capital: The WACC for a firm is 13.00 percent. You know that the firm's cost of debt capital is 10 percent and the cost of equity capital is 20% What proportion of the firm is financed with debt?