1. Statement of Cash Flows Ann's Flowers Inc. reported 2008 net income of $2.60 million and depreciation of $266,000. The top part Ann's Flowers, Inc.'s 2007 and 2008 balance sheets is listed below (in millions of dollars).
|
Current assets:
|
2007
|
2008
|
Current liabilities:
|
2007
|
2008
|
|
Cash and marketable securities
|
$4.60
|
$2.80
|
Accrued wages and taxes
|
$1.16
|
$1.16
|
|
Accounts receivable
|
4.80
|
6.60
|
Accounts payable
|
3.16
|
4.80
|
|
Inventory
|
7.60
|
5.80
|
Notes payable
|
12.68
|
9.24
|
|
Total
|
$17.00
|
$15.20
|
Total
|
$17.00
|
$15.20
|
What is the 2008 net cash flow from operating activities for Ann's Flower's, Inc.?
-$1,800,000
$1,906,000
$2,600,000
$4,506,000
2. Free Cash Flow Catering Corp. reported free cash flows for 2008 of $8.04 million and investment in operating capital of $2.04 million. Catering listed $1.04 million in depreciation expense and $2.04 million in taxes on its 2008 income statement. What was Catering's 2008 EBIT?
$13.16 million
$11.08 million
$7 million
$10.08 million
3. Statement of Retained Earnings Z, Corp. began the year 2008 with $1.8 million in retained earnings. The firm earned net income of $5.8 million in 2008 and paid $2.92 million to its common stockholders. What is the year-end 2008 balance in retained earnings for Z?
$4.68 million
$10.52 million
$7.6 million
$1.08 million
4. Internal Growth Rate Leash N Collar reported a profit margin of 9.9%, total asset turnover ratio of 3.4 times, debt-to-equity ratio of 0.94 times, net income of $590,000, and dividends paid to common stockholders of $390,000. The firm has no preferred stock outstanding. What is Leash N Collar's internal growth rate? (Do not round intermediate steps.)
9.101%
1.9709%
10.9878%
12.8798%
5. DuPont Analysis Last year, PJ's Ice Cream Parlors, Inc. reported an ROE =12.3%. The firm's debt ratio was 37%, sales were $28 million, and the capital intensity ratio was .78 times. What is the net income for PJ's last year? (Do not round intermediate steps.)
$21.84 m
$3.44m
$1.69 m
$2.69 in
6. Asset Management and Profitability Ratios You have the following information on Universe It Ts, Inc.: sales to working capital =10 times, profit margin = 25%, net income available to common stockholders = $3 million, and current liabilities = $1 million. What is the firm's balance of current assets?
$1.075 m
$5m
$2.2m
$1.2m
7. Solving for Rates What annual rate of return is earned on a $1,800 investment when it grows to $4,100 in nine years?
1.28%
8.58%
9.58%
2.28%
8. Interest-on-Interest Consider a $2,400 deposit earning 11 percent interest per year for 8 years. How much total interest is earned on interest (excluding interest earned on the original deposit)?
$3,130.89
$2,112.00
$211.20
$1,018.89
9. Interest-on-Interest Consider a $3,900 deposit earning 10 percent interest per year for 9 years. How much total interest is earned on the original deposit (excluding interest earned on interest)?
$3,510.00
$351.00
$5,295.00
$1,785.00
10. Present Value of a Perpetuity What's the present value, when interest rates are 6.80 percent, of a $230 payment made every year forever?
$2,300.00
$1,564.00
$3,382.35
$15.64
11. Future Value of an Annuity Due If the future value of an ordinary, 6-year annuity is $6,500 and interest rates are 7 percent, what's the future value of the same annuity due?
$6,500
$6,890
$6,074.77
$6,954.98
12. Present Value of an Annuity What is the present value of a $800 annuity payment over 6 years if interest rates are 8 percent?
$4,165.10
$1,269.50
$504.14
$3,698.30
13. Determinants of Interest Rate for Individual Securities The Well Street Journe/reports that the rate on 3-year Treasury securities is 6.20 percent, and the 6-year Treasury rate is 6.45 percent. From discussions with your broker, you have determined that expected inflation premium is 2.45 percent next year, 2.50 percent in Year 2, and 2.80 percent in Year 3 and beyond. Further, you expect that real interest rates will be 3.30 percent annually for the foreseeable future. What is the maturity risk premium on the 6-year Treasury security?
.10%
.35%
.70%
.65%
14. Taxable Equivalent Yield What's the taxable equivalent yield on a municipal bond with a yield to maturity of 4.6 percent for an investor in the 28 percent marginal tax bracket? (Round your answer to 2 decimal places.)
6.39%
4.60%
16.43%
1.29%
15. Taxable Equivalent Yield What's the taxable equivalent yield on a municipal bond with a yield to maturity of 4.50 percent for an investor in the 33 percent marginal tax bracket? (Round your answer to 2 decimal places.)
13.64 %
1.49%
4.50%
6.72%
16. Current Yield What's the current yield of a 5.50 percent coupon corporate bond quoted at a price of 98.55? (Round your answer to 1 decimal place.)
5.6%
9.9%
5.5%
5.4%
17. Changes in Growth and Stock Valuation Consider a firm that had been priced using a 9 percent growth rate and a 12 percent required rate. The firm recently paid a $1.80 dividend. The firm has just announced that because of a new joint venture, it will likely grow at a 10 percent rate. How much should the stock price change (in dollars and percentage)?
$17.40,18%
$17.40, 569%
$33.60, 51%
$33.60, 34%
18. Dividend Initiation and Stock Value A firm does not pay a dividend. It is expected to pay its first dividend of $0.35 per share in 2 years. This dividend will grow at 10 percent indefinitely. Using a 12 percent discount rate, compute the current value of this stock.
$15.98
$17.85
$17.50
$15.63
19. Average Return The past five monthly returns for PG Company are 2.85 percent, -.65 percent, 4.25 percent, 6.39 percent, and 3.94 percent. What is the average monthly return?
3.486%
1.398%
1.453%
3.356%
20. Average Return The past five monthly returns for K and Company are 4.95 percent, 5.12 percent, -.25 percent, -.25 percent, and 9.70 percent. What is the average monthly return?
3.854%
4.054%
1.606%
1.689%
21. Portfolio Beta You own $1,300 of City Steel stock that has a beta of 1.56. You also own $5,600 of Rent-N-Co (beta =1.86) and $4,600 of Lincoln Corporation (beta = .96). What is the beta of your portfolio (closest to)?
4.38
2.79
1.47
1.00
22. Portfolio Beta You own $34,600 of City Steel stock that has a beta of 3.40. You also own $44,500 of Rent-N-Co (beta =1.89) and $21.900 of Lincoln Corporation (beta = -.71). What is the beta of your portfolio?
4.56
1.84
1.00
4.58