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Question
Calculate Squamish's times burden covered ratio for the next year assuming annual sinking fund payments on the new debt will equal $8 million.
A. 1.01
B. 1.08
C. 1.38
D. 1.49
E. 1.95
F. None of the above.
Answer
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Related questions
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The weighted average cost of capital for a firm is the:A. discount rate which the firm should apply to all of the projects it undertakes.B. rate of return a firm must earn on its existing assets to maintain the current value of its stock.C. coupon rate the firm should expect to pay on its next bond issue.D. minimum discount rate the firm should require on any new project.E. rate of return shareholders should expect to earn on their investment in this firm.F. None of the above.
Q:
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II. There is no reward for accepting diversifiable risks.
III. Diversifiable risks are generally associated with an individual firm or industry.
IV. Beta measures diversifiable risk.
A. I and III only
B. II and IV only
C. I and IV only
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Q:
Unsystematic risk:
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C. is measured by beta.
D. is measured by standard deviation.
E. is related to the overall economy.
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Q:
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A. beta; alpha
B. beta; standard deviation
C. WACC; beta
D. standard deviation; beta
E. standard deviation; variance
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Q:
When making a capital budgeting decision, which of the following is/are NOT relevant?
I. The size of a cash flow.
II. The risk of a cash flow.
III. The accounting earnings from a cash flow.
IV. The timing of a cash flow.
A. I only
B. II only
C. III only
D. II and III only
E. III and IV only
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Q:
Which of the following statements related to the internal rate of return (IRR) are correct?
I. The IRR is the discount rate at which an investment's NPV equals zero.
II. An investment should be undertaken if the discount rate exceeds the IRR.
III. The IRR tends to be used more than net present value simply because its results are easier to comprehend.
IV. The IRR is the best tool available for deciding between mutually exclusive investments.
A. I and II only
B. I and III only
C. II and III only
D. I, II, and IV only
E. I, II, III, and IV
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Q:
Which of the following figures of merit does not directly take into consideration the time value of money?
I. Payback period
II. Internal rate of return
III. Net present value (NPV)
IV. Accounting rate of return
A. IV only
B. I & III only
C. II & III only
D. I & II only
E. I & IV only
F. I, II, III, and IV
Q:
Which of the following factors favor the issuance of debt in the financing decision?
I. Market signaling
II. Distress costs
III. Management incentives
IV. Financial flexibility
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B. I and III only
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Depreciation expense:
A. reduces both taxes and net income.
B. increases the net fixed assets as shown on the balance sheet.
C. reduces both the net fixed assets and the costs of a firm.
D. is a noncash item that increases net income.
E. decreases current assets, net income, and operating cash flows.
Q:
Which one of the following is the financial statement that summarizes changes in the company's cash balance over a period of time?
A. income statement
B. balance sheet
C. cash flow statement
D. shareholders' equity statement
E. market value statement
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A. income statement
B. balance sheet
C. cash flow statement
D. sources and uses statement
E. market value statement
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A. income statement
B. creditor's statement
C. balance sheet
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E. sources and uses statement
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Q:
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A. I and II only
B. I and III only
C. I, II, and IV only
D. I, III, and IV only
E. I, II, III, and IV
F. None of the above.
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Q:
The sustainable growth rate of a firm is best described as the:
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B. minimum growth rate achievable if the firm maintains a constant equity multiplier.
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Which one of the following correctly defines the retention ratio?
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Q:
The retention ratio is:
A. equal to net income divided by the change in total equity.
B. the percentage of net income available to the firm to fund future growth.
C. equal to one minus the asset turnover ratio.
D. the change in retained earnings divided by the dividends paid.
E. the dollar increase in net income divided by the dollar increase in sales.
F. None of the above.
Q:
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Q:
Which of the following are viable techniques to cope with the uncertainty inherent in realistic financial projections?
I. Simulation
II. Ad hoc adjustments
III. Scenario analysis
IV. Sensitivity analysis
A. II and IV only
B. III and IV only
C. II, III, and IV only
D. I, II, and III only
E. I, III, and IV only
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Q:
Consider the following premerger information about a bidding firm (Buyitall Inc.) and a target firm (Tarjay Corp.). Assume that neither firm has any debt outstanding. Buyitall has estimated that the present value of any enhancements that Buyitall expects from acquiring Tarjay is $2,600. What is the NPV of the merger assuming that Tarjay is willing to be acquired for $28 per share in cash?A. $400B. $600C. $1,800D. $2,200E. $2,600F. None of the above.
Q:
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A. $2.21 billion
B. $2.71 billion
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E. None of the above.
Q:
Which of the following statements are correct?
I. Liquidation value of a firm is equal to the present worth of expected future cash flows from operating activities.
II. When an acquiring firm purchases a target firm's equity, the acquirer must assume the target's liabilities.
III. The market value of a public company reflects the worth of the business to minority investors.
IV. The fair market value of a business is usually the lower of its liquidation value and its going-concern value.
A. I and III only
B. II and IV only
C. II and III only
D. I, II, and III only
E. II, III, and IV only
F. None of the above.