FIN 571 Week 6 Final Examination 1. Which one of the following parties is considered a stakeholder of a firm? 2. A stakeholder is any person or entity: 3. Financial managers primarily create firm value by: 4. For a firm to create value it must: 5. For each of the following, compute the present value (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.): 6. a. Compute the future value of $2,000 compounded annually for 10 years at 6 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Compute the future value of $2,000 compounded annually for 10 years at 11 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. Compute the future value of $2,000 compounded annually for 15 years at 6 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 7. Gerold invested $111 in an account that pays 5 percent simple interest. How much money will he have at the end of 6 years? 8. You bought 360 shares of stock at a total cost of $7,754.40. You received a total of $403.20 in dividends and sold your shares for $19.98 a share. What was your total rate of return? 9. BCD shares are currently selling for $27.38 each. You bought 200 shares one year ago at $26.59 and received dividend payments of $1.27 per share. What was your percentage capital gain for the year? 10. Sankey, Inc., has current assets of $7,200, net fixed assets of $25,400, current liabilities of $6,350, and long-term debt of $15,100. (Do not round intermediate calculations.) What is the value of the shareholders’ equity account for this firm? How much is net working capital? 11. Shelton, Inc., has sales of $389,000, costs of $177,000, depreciation expense of $42,000, interest expense of $23,000, and a tax rate of 35 percent. (Do not round intermediate calculations.) What is the net income for the firm? Suppose the company paid out $32,000 in cash dividends. What is the addition to retained earnings? 12. The financial statement summarizing a firm’s accounting performance over a period of time is the: 13. Which one of these accounts is classified as a current asset on the balance sheet? 14. Jessica’s Boutique has cash of $58, accounts receivable of $52, accounts payable of $210, and inventory of $160. What is the value of the quick ratio? 15. Galaxy United, Inc. 2009 Income Statement ($ in thousands) Net sales $5,740 Less: Cost of goods sold 4,050 Less: Depreciation 420 Earnings before interest and taxes 1,270 Less: Interest paid 29 Taxable Income 1,241 Less: Taxes 434 Net income $ 807 Galaxy United, Inc. 2008 and 2009 Balance Sheets ($ in thousands) 2008 2009 2008 2009 Cash $ 70 $ 160 Accounts payable $1,350 $1,260 Accounts rec. 970 820 Long-term debt 710 520 Inventory 1,500 1,990 Common stock $3,130 $3,263 Total $2,540 $2,970 Retained earnings 920 1,227 Net fixed assets 3,570 3,300 Total assets $6,110 $6,270 Total liab. & equity $6,110 $6,270 What is the debt-equity ratio for 2009? 16. A firm has total debt of $1,160 and a debt-equity ratio of .26. What is the value of the total assets? 17. A firm has a debt-equity ratio of .36. What is the total debt ratio? 18. A firm has net working capital of $366, net fixed assets of $2,258, sales of $6,000, and current liabilities of $800. How many dollars worth of sales are generated from every $1 in total assets? 19. The external funds needed (EFN) equation projects the addition to retained earnings as: 20. The sustainable growth rate: 21. The return on equity can be calculated as: 22. The Wintergrass Company has an ROE of 13.2 percent and a payout ratio of 30 perc
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