Fin 534 Week 8 Quiz 7

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FIN 534 Week 8 Quiz 7

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Download answer at http://www.examtutorials.com/course/fin-534-week-8-quiz-7/
his quiz consist of 30 multiple choice questions. The first 15 questions cover the material in Chapter 12. The second 15 questions cover the material in Chapter 13. Be sure you are in the correct Chapter when you take the quiz.Question 1Last year Godinho Corp. had $250 million of sales, and it had $75 million of fixed assets that were being operated at 80% of capacity. In millions, how large could sales have been if the company had operated at full capacity?Question 2Which of the following is NOT a key element in strategic planning as it is described in the text?Question 3Spontaneous funds are generally defined as follows:Question 4Which of the following statements is CORRECT?Question 5Which of the following statements is CORRECT?Question 6Which of the following statements is CORRECT?Question 7The capital intensity ratio is generally defined as follows:Question 8A company expects sales to increase during the coming year, and it is using the AFN equation to forecast the additional capital that it must raise. Which of the following conditions would cause the AFN to increase?Question 9Which of the following statements is CORRECT?Question 10Which of the following is NOT one of the steps taken in the financial planning process?Question 11Which of the following statements is CORRECT?Question 12Which of the following assumptions is embodied in the AFN equation?Question 13The term “additional funds needed (AFN)” is generally defined as follows:Question 14Which of the following statements is CORRECT?Question 15Last year Handorf-Zhu Inc. had $850 million of sales, and it had $425 million of fixed assets that were used at only 60% of capacity. What is the maximum sales growth rate the company could achieve before it had to increase its fixed assets?Question 16Which of the following statements is NOT CORRECT?Question 17Based on the corporate valuation model, Hunsader’s value of operations is $300 million. The balance sheet shows $20 million of short-term investments that are unrelated to operations, $50 million of accounts payable, $90 million of notes payable, $30 million of long-term debt, $40 million of preferred stock, and $100 million of common equity. The company has 10 million shares of stock outstanding. What is the best estimate of the stock’s price per share?Question 18Which of the following is NOT normally regarded as being a good reason to establish an ESOP?Question 19Zhdanov Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be -$10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 14%, what is the firm’s value of operations, in millions?Question 20Leak Inc. forecasts the free cash flows (in millions) shown below. If the weighted average cost of capital is 11% and FCF is expected to grow at a rate of 5% after Year 2, what is the Year 0 value of operations, in millions? Assume that the ROIC is expected to remain constant in Year 2 and beyond (and do not make any half-year adjustments).Year: 1 2Free cash flow: -$50 $100.......
http://www.examtutorials.com/course/fin-534-week-8-quiz-7/Download answer at https://www.examtutorials.com/course/fin-534-week-8-quiz-7/
his quiz consist of 30 multiple choice questions. The first 15 questions cover the material in Chapter 12. The second 15 questions cover the material in Chapter 13. Be sure you are in the correct Chapter when you take the quiz.Question 1Last year Godinho Corp. had $250 million of sales, and it had $75 million of fixed assets that were being operated at 80% of capacity. In millions, how large could sales have been if the company had operated at full capacity?Question 2Which of the following is NOT a key element in strategic planning as it is described in the text?Question 3Spontaneous funds are generally defined as follows:Question 4Which of the following statements is CORRECT?Question 5Which of the following statements is CORRECT?Question 6Which of the following statements is CORRECT?Question 7The capital intensity ratio is generally defined as follows:Question 8A company expects sales to increase during the coming year, and it is using the AFN equation to forecast the additional capital that it must raise. Which of the following conditions would cause the AFN to increase?Question 9Which of the following statements is CORRECT?Question 10Which of the following is NOT one of the steps taken in the financial planning process?Question 11Which of the following statements is CORRECT?Question 12Which of the following assumptions is embodied in the AFN equation?Question 13The term “additional funds needed (AFN)” is generally defined as follows:Question 14Which of the following statements is CORRECT?Question 15Last year Handorf-Zhu Inc. had $850 million of sales, and it had $425 million of fixed assets that were used at only 60% of capacity. What is the maximum sales growth rate the company could achieve before it had to increase its fixed assets?Question 16Which of the following statements is NOT CORRECT?Question 17Based on the corporate valuation model, Hunsader’s value of operations is $300 million. The balance sheet shows $20 million of short-term investments that are unrelated to operations, $50 million of accounts payable, $90 million of notes payable, $30 million of long-term debt, $40 million of preferred stock, and $100 million of common equity. The company has 10 million shares of stock outstanding. What is the best estimate of the stock’s price per share?Question 18Which of the following is NOT normally regarded as being a good reason to establish an ESOP?Question 19Zhdanov Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be -$10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 14%, what is the firm’s value of operations, in millions?Question 20Leak Inc. forecasts the free cash flows (in millions) shown below. If the weighted average cost of capital is 11% and FCF is expected to grow at a rate of 5% after Year 2, what is the Year 0 value of operations, in millions? Assume that the ROIC is expected to remain constant in Year 2 and beyond (and do not make any half-year adjustments).Year: 1 2Free cash flow: -$50 $100.......
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