Fin 340 - Study guides, Class notes & Summaries

FIN 3400 Ch 12 SMARTBOOK - Complete Solutions (Verified) In 4 years, an existing machine will have a zero book value and a market value of $4,200. A new machine costing $26,400 can replace this machine, lower variable costs by $8,200 a year, and have a market value of $13,300 and a zero book value in 4 years. The incremental depreciation is $5,300. The tax rate is 35%. What is the operating cash flow for year 4? $7,185 Rationale: OCF = ($8,200 - $5,300)(1 - 0.35) + $5,300 = $7,185 A firm purchas...

FIN 3400 Chapter 12 Assignment Questions and Answers- Florida International University What is pro forma analysis? Multiple choice question. Comparing the financial statements from one time period to another Ascertaining how an action would affect a firm's taxes Reviewing historical data to determine trends Estimation of future project cash flows using only the relevant parts of the financial statements What is an incremental cash flow? Multiple choice question. A cash flow that incre...

FIN 3400 Chapter 03 Assignment Questions and Answers- Florida International University The Shoe Store has cash of $300, accounts receivable of $700, accounts payable of $800, inventory of $1,300, long-term debt of $1,900, and notes payable in three months of $500. What is the current ratio? Multiple choice question. 2.14 2.88 1.77 0.72 Reason: Current assets = $300 + $700 + $1,300 = $2,300 Current liabilities = $800 + $500 = $1,300 Current ratio = $2,300/$1,300 = 1.77 Jen's has curr...

FIN 3400 Chapter 14 Assignment Questions and Answers- Florida International University Select all that apply Which of these can cause a firm to incur shortage costs? Select all that apply. Multiple select question. Granting too little credit to customers Being out of an inventory item Borrowing too much from suppliers Having too little cash on hand A firm should try to equal the marginal benefit of each dollar invested in net working capital with which one of these? Multiple choice que...

FIN 3400 Ch 14 SMARTBOOK - Complete Solutions (Verified) Which entities issue commercial paper? Select all that apply. Medium-to-large corporations Large banks A banker's acceptance (B.A.) has which one of these characteristics? Low risk Rationale: A banker's acceptance carries a bank guarantee which makes it low-risk. Which term refers to a firm's need to keep cash on hand to pay normal expenses such as utilities and wages? Transaction facilitation Which of these correctly describe the Baum...

FIN 3400 Chapter 09 Assignment Questions and Answers- Florida International University True or false: A high-risk investment can underperform a low-risk investment over the short term. True false question. True False How is the term "dollar return" defined? Multiple choice question. Amount of profit or loss expressed as an annual rate Amount of profit or loss from an investment expressed as a percentage of the ending price Amount of profit or loss from an investment expressed in dolla...

FIN 3400 Chapter 10 Assignment Questions and Answers- Florida International University Select all that apply Which of the following will decrease the risk level of a firm? Select all that apply. Multiple select question. Selling the lowest-risk division Accepting riskier projects Accepting a low-risk project Acquiring a less risky firm Which one of these best illustrates a probability distribution at it relates to next year's economy? Multiple choice question. 15 percent chance of a b...

FIN 3400 Chapter 05 Assignment Questions and Answers- Florida International University You plan to invest $300 today and $500 three years from today. Two years from today, you plan to withdraw $50. Which of these is a correct statement regarding a time line for computing the future value of your cash flows four years from today? Multiple choice question. The cash flow at year 4 is a negative $500. The cash flow at time 0 is a positive $300. The cash flow at year 2 is a negative $50. The...

FIN 3400 Chapter 02 Assignment Questions and Answers- Florida International University Which one of these is not one of the four basic financial statements? Multiple choice question. Statement of ratios Balance sheet Statement of cash flows Income statement Which one of these correctly defines the balance sheet identity? Multiple choice question. Liabilities - Equity = Assets Equity = Assets - Liabilities Liabilities = Assets + Equity Equity = Assets + Liabilities A firm has fixed a...

FIN 3400 Chapter 06 Assignment Questions and Answers- Florida International University How is a primary market defined? Multiple choice question. A primary market is the market in which a handful of institutions purchase an entire issue of securities. A primary market is the sale of any security that has been registered with the SEC. A primary market is a market in which corporations and other fund demanders obtain funds by issuing new securities. The primary market is defined as the ma...