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Question
Calculate Squamish's times interest earned ratio for next year assuming the firm raises $40 million of new debt at an interest rate of 7 percent.
A. 2.00
B. 3.09
C. 3.66
D. 4.35
E. None of the above.
Answer
This answer is hidden. It contains 97 characters.
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.
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II. There is no reward for accepting diversifiable risks.
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Unsystematic risk:
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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
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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.
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B. II only
C. III 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.
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Which of the following figures of merit does not directly take into consideration the time value of money?
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II. Internal rate of return
III. Net present value (NPV)
IV. Accounting rate of return
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Which of the following factors favor the issuance of debt in the financing decision?
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II. Distress costs
III. Management incentives
IV. Financial flexibility
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B. I and III only
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C. the borrowing or lending of money by individual shareholders as a means of adjusting their level of financial leverage.
D. best defined as an increase in a firm's debt-equity ratio.
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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.
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Which one of the following is the financial statement that summarizes changes in the company's cash balance over a period of time?
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B. balance sheet
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B. balance sheet
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II. Shelf registrations and private placements are examples of seasoned security issues.
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IV. Private equity financing is a common source of financing for startup firms.
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Q:
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Which of the following are viable techniques to cope with the uncertainty inherent in realistic financial projections?
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II. Ad hoc adjustments
III. Scenario analysis
IV. Sensitivity analysis
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A. decrease in the fixed asset turnover rate
B. decrease in the financial leverage ratio
C. increase in the inventory turnover rate
D. increase in the day's sales in inventory
E. no change in the total asset turnover rate
Q:
Which one of the following ratios identifies the amount of assets a firm needs in order to generate $1 in sales?
A. current ratio
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Below is a recent income statement for Gatlin Camera:
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.