BU 381 Last Exam 2023

Which of these is defined as the excess amounts of a current asset kept on hand to meet unexpected shocks in demand?

A bond’s main characteristics include

If a firm has already paid an expense regardless of whether a particular project is undertaken, that expense is a(n)

Which of the following terms is the chance that the bond issuer will not be able to make timely payments?

Carrying costs the lost sale if the company runs out of a particular model.

Which of these is used as a measure of the total amount of available cash flow from a project?

All else the same, an investor will require less return to invest in a callable bond than one that is not callable.

Investors sell stock at the

Which of the following is the reward investors require for taking risk?

Which of these is the dollar return characterized as a percentage of money invested?

The dividend discount model

Which statement is true?

Which term includes both firm specific risk as well as market risk?

Bond prices are quoted in terms of which of the following?

As residual claimants, which of these investors claim any cash flows after the firm pays all other claims?

The least-used capital budgeting technique in industry is

As new capital budgeting projects arise, we must estimate

The size of the firm measured as the current stock price multiplied by the number of shares outstanding is

Which of these is a measure of the sensitivity of a stock or portfolio to market risk?

Which of the following is the reward investors require for taking risk?

Under what conditions is a bond likely to be called?

The bond's annual coupon rate divided by its market price is referred to as the

A capital budgeting technique that generates a decision rule for choosing projects based on the total discounted value

Carrying costs include the opportunity costs associated with having capital tied up in current assets

Which of the following is a reason municipal bonds offer lower rates of interest income for their investors?

If a firm has a cash cycle of 25 days and an operating cycle of 80 days, what is its average payment period?

Regarding a bond's characteristics, which of the following is the principal loan amount that the borrower must repay?

Which of these includes any capital gain (or loss) and any income you received from an investment?

A bond's current yield is defined as

Which of these is a measure summarizing the overall past performance of an investment?

All else the same, an investor will require more return to invest in a callable bond than one that is not callable.

Which technique for evaluating capital projects tells how long it will take a firm to earn back the money invested

If the risk-free rate is 8 percent and the market risk premium is 2 percent, what is the required return for the market?

Which of the following is used to compute bond cash interest payments?

Concerning incremental project cash flow, which of these is a cost one would never count as an expense of the project?

Which of the following is the asset pricing theory based on a beta, a measure of market risk?

Which of these is defined as a combination of investment assets held by an investor?

If the firm wants to identify the percentage of accounts receivable that are over 90 days old, the firm should prepare

Which of these describe groups or pairs of projects where you can accept one but not all?

When calculating the weighted average cost of capital, weights are based on

All of the following are strengths of NPV EXCEPT

Which of the following is NOT one of the "five C's" of credit analysis?

The interest rate used to compute the bond’s interest payment each year refers to

Which of these is the measurement of risk for a collection of stocks for an investor?

Bonds are issued by which of the following?

To find the percentage return of an investment

Why do firms offer customers discounts for paying early?

The call feature does not impact the return that investors demand.

Which statement is true regarding cost-cutting proposals?

Carrying costs include rental payments on storage facilities where inventory is maintained.

Neither payback period nor discounted payback period techniques for evaluating capital projects account for

When calculating the operating cash flow for a project, one would calculate it as

The area of management concerned with designing and overseeing the process of production is which of the following?

The process of putting money in different types of investments to reducing risk of the portfolio is called

Operating cycle is measured as

All of the following items would need to be included in the bond's indenture agreement EXCEPT

Preferred stock is largely owned by other companies rather than individual investors.

Investors buy stock at the

Preferred stock dividends do not grow.

Preferred stock takes preference over common stock in bankruptcy proceedings.

A bond with an 8.75 percent coupon and a market interest rate of 6.25 percent. Is this a discount or a premium bond?

Which of the following is a measurement of the co-movement between two variables that ranges between −1 and +1?

Concerning incremental project cash flow, which of these is a cost one would never count as an expense of the project?

If a bond is selling at a discount, which of the following statements is correct?