1. Description / Instructions: Complete final exam.
Question 1
Which of the following is considered a hybrid organizational
form?
sole proprietorship
partnership
corporation
limited liability partnership

2. Question 2
Which of the following is a principal within the agency
relationship?
a company engineer
the CEO of the firm
a shareholder
the board of directors

3. Question 3
Teakap, Inc., has current assets of $ 1,456,312 and total assets
of $4,812,369 for the year ending September 30, 2006. It also
has current liabilities of $1,041,012, common equity of
$1,500,000, and retained earnings of $1,468,347. How much
long-term debt does the firm have?
$803,010
$2,303,010

4. $2,123,612
$1,844,022
Question 4
Which of the following presents a summary of the changes in a
firm’s balance sheet from the beginning of an accounting period
to the end of that accounting period?

5. The statement of cash flows.
The statement of net worth.
The statement of retained earnings.
The statement of working capital.

6. Question 5
Efficiency ratio: Gateway Corp. has an inventory turnover ratio
of 5.6. What is the firm's days's sales in inventory?
61.7 days
57.9 days
65.2 days
64.3 days

7. Question 6
Leverage ratio: Your firm has an equity multiplier of 2.47.
What is its debt-to-equity ratio?
0
0.60
1.47
1.74

8. Question 7
Which of the following is not a method of “benchmarking”?
Utilize the DuPont system to analyze a firm’s performance.
Conduct an industry group analysis.
Evaluating a single firm’s performance over time.
Identify a group of firms that compete with the company being
analyzed.

9. Question 8
Present value: Jack Robbins is saving for a new car. He needs to
have $ 21,000 for the car in three years. How much will he have
to invest today in an account paying 8 percent annually to
achieve his target? (Round to nearest dollar.)
$26,454
$19,444
$22,680

10. $16,670
Question 9
PV of multiple cash flows: Ferris, Inc., has borrowed from their
bank at a rate of 8 percent and will repay the loan with interest
over the next five years. Their scheduled payments, starting at
the end of the year are as follows—$450,000, $560,000,
$750,000, $875,000, and $1,000,000. What is the present value
of these payments? (Round to the nearest dollar.)

11. $2,815,885
$2,615,432
$2,735,200
$2,431,224

12. Question 10
PV of multiple cash flows: Ajax Corp. is expecting the
following cash flows—$79,000, $112,000, $164,000, $84,000,
and $242,000—over the next five years. If the company's
opportunity cost is 15 percent, what is the present value of these
cash flows? (Round to the nearest dollar.)
$429,560
$414,322
$480,906
$477,235

13. Question 11
Future value of an annuity: Jayadev Athreya has started on his
first job. He plans to start saving for retirement early. He will
invest $5,000 at the end of each year for the next 45 years in a
fund that will earn a return of 10 percent. How much will
Jayadev have at the end of 45 years? (Round to the nearest
dollar.)
$2,667,904
$3,594,524
$1,745,600
$5,233,442

14. Question 12
Serox stock was selling for $20 two years ago. The stock sold
for $25 one year ago, and it is currently selling for $28. Serox
pays a $1.10 dividend per year. What was the rate of return for
owning Serox in the most recent year? (Round to the nearest
percent.)
40%
16%

15. 32%
12%
Question 13
Bond price: Regatta, Inc., has six-year bonds outstanding that
pay a 8.25 percent coupon rate. Investors buying the bond today
can expect to earn a yield to maturity of 6.875 percent. What
should the company's bonds be priced at today? Assume annual
coupon payments. (Round to the nearest dollar.)

16. $1,066
$923
$972
$1,014

17. Question 14
PV of dividends: Next year Jenkins Traders will pay a dividend
of $3.00. It expects to increase its dividend by $0.25 in each of
the following three years. If their required rate of return is 14
percent, what is the present value of their dividends over the
next four years?
$9.72
$12.50
$11.63
$13.50

18. Question 15
Capital rationing. TuleTime Comics is considering a new show
that will generate annual cash flows of $100,000 into the
infinite future. If the initial outlay for such a production is
$1,500,000 and the appropriate discount rate is 6 percent for the
cash flows, then what is the profitability index for the project?
0.90
0.11
1.90
1.11

19. Question 16
What decision criteria should managers use in selecting projects
when there is not enough capital to invest in all available
positive NPV projects?
The profitability index.
The discounted payback.
The internal rate of return.

20. The modified internal rate of return.
Question 17
How firms estimate their cost of capital: The WACC for a firm
is 13.00 percent. You know that the firm's cost of debt capital is
10 percent and the cost of equity capital is 20%. What
proportion of the firm is financed with debt?

21. 70%
30%
33%
50%
Question 18

22. The cost of equity: Gangland Water Guns, Inc., is expected to
pay a dividend of $2.10 one year from today. If the firm's
growth in dividends is expected to remain at a flat 3 percent
forever, then what is the cost of equity capital for Gangland if
the price of its common shares is currently $17.50?
15.00%
12.00%
15.36%
14.65%

23. Question 19
If a company's weighted average cost of capital is less than the
required return on equity, then the firm:
Has debt in its capital structure
Is financed with more than 50% debt
Must have preferred stock in its capital structure
Is perceived to be safe

24. Question 20
A firm's capital structure is the mix of financial securities used
to finance its activities and can include all of the following
except
stock.
bonds.
equity options.
preferred stock.

25. Question 21
M&M Proposition 1: Dynamo Corp. produces annual cash flows
of $150 and is expected to exist forever. The company is
currently financed with 75 percent equity and 25 percent debt.
Your analysis tells you that the appropriate discount rates are
10 percent for the cash flows, and 7 percent for the debt. You
currently own 10 percent of the stock.
If Dynamo wishes to change its capital structure from 75
percent to 60 percent equity and use the debt proceeds to pay a
special dividend to shareholders, how much debt should they
issue?

26. $321
$600
$375
$225

27. Question 22
Multiple Analysis: Turnbull Corp. had an EBIT of $247 million
in the last fiscal year. Its depreciation and amortization
expenses amounted to $84 million. The firm has 135 million
shares outstanding and a share price of $12.80. A competing
firm that is very similar to Turnbull has an enterprise
value/EBITDA multiple of 5.40.
What is the enterprise value of Turnbull Corp.? Round to the
nearest million dollars.
$453.6 million
$1,315 million
$1,334 million
$1,787 million

28. Question 23
External financing needed: Jockey Company has total assets
worth $4,417,665. At year-end it will have net income of
$2,771,342 and pay out 60 percent as dividends. If the firm
wants no external financing, what is the growth rate it can
support?
27.3%
30.3%
25.1%
32.9%

29. Question 24
Which of the following cannot be engaged in managing the
business?
a general partner
a limited partner
none of these

30. a sole proprietor
Question 25
Which of the following does maximizing shareholder wealth not
usually account for?
Risk.

31. Government regulation.
The timing of cash flows.
Amount of Cash flows.
Question 26

32. The strategic plan does NOT identify
major areas of investment in real assets.
the lines of business a firm will compete in.
working capital strategies.
future mergers, alliances, and divestitures.

33. Question 27
Firms that achieve higher growth rates without seeking external
financing
have a low plowback ratio.
have less equity and/or are able to generate high net income
leading to a high ROE.
are highly leveraged.
none of these.

34. Question 28
Payout and retention ratio: Drekker, Inc., has revenues of
$312,766, costs of $220,222, interest payment of $31,477, and a
tax rate of 34 percent. It paid dividends of $34,125 to
shareholders. Find the firm's dividend payout ratio and retention
ratio.
15%, 85%
45%, 55%
85%, 15%
55%, 45%

35. Question 29
The cash conversion cycle
estimates how long it takes on average for the firm to collect its
outstanding accounts receivable balance.
shows how long the firm keeps its inventory before selling it.
begins when the firm invests cash to purchase the raw materials
that would be used to produce the goods that the firm
manufactures.

36. begins when the firm uses its cash to purchase raw materials
and ends when the firm collects cash payments on its credit
sales.
Question 30
You are provided the following working capital information for
the Ridge Company:
Ridge Company
Account
$

37. Inventory
$12,890
Accounts receivable
12,800
Accounts payable
12,670
Net sales
$124,589
Cost of goods sold
99,630
Cash conversion cycle: What is the cash conversion cycle for
Ridge Company?
38.3 days
83.5 days
129.9 days
46.4 days

38. Requirements of Integrated Inventory Management System
Requirements of Integrated Inventory Management System
By
Jane Doe
Jim Smith
Doug Williams
November 27, 2011
DeVry University
Requirements of Integrated Inventory Management System
This is the area where the introduction goes, but notice
that there is no section title “Introduction”. Instead, your paper
merely starts with the un-bolded title of the paper. You should
think about it all session, but usually it is best to write, or at
least finish the introduction after you have written the bulk of
the paper. The introduction should explain the problem to be
solved and the overall goal of the project as performed in the
iLabs – which has basically been to create an integrated system
for inventory management. Talk about how this was
accomplished and what tools you were using. Also list what
techniques and theory were used from the course. This is not a
suspense novel, so go ahead and tell the reader whether or not

39. the project was successful; do not worry about spoilers.
Typically, the introduction will run about two good-sized
paragraphs and contain one or more references. While this
document will suggest page lengths for each section, the actual
length should be based upon the length needed to say what you
need to say.
Database Description
On week 1, the team will research the MySQL database
technology, reporting on its capabilities, background, and its
comparison to other database systems. Compare and contrast
MySQL to at least two other major database systems. Look at
not just capabilities, but also consider topics such as system
requirements. Why did you company choose it over the others?
This section should be at least one page or more. Most likely
you will have a table or chart for comparisons. Be sure to list
all of your references for the database information.
Language Selection
What are the languages used in today’s business development
environment, and where does C#.NET fit in? Use week 2 to
compare and contrast the major development languages and
explain why you company chose C#.NET. What does the .NET
mean? While this class focuses on the Windows console, what
other interface modalities exist that users might employee to get
information from your database? Explain what an IDE is. This
section should be at least one page or more. Most likely you
will have a table or chart for comparisons. Be sure to list all of
your references for the information on programming languages
and related tools.
Database Connections
This class will use ODBC to connect Visual Studio to MySQL,
but what other methods exist for connecting programming
languages to databases? Use week 3 to identify connection
techniques or other technologies that get data to or from the
database and into the hands of stakeholders. Are some
languages better than others for this purpose? What must be
taken into consideration when the program and database are not

40. located on the same server? How does security play into this?
This section should be at least one page or more. Perhaps add a
diagram or two (using Visio) that shows the architecture of
program to database connectivity. Another diagram should
show the entity relationship diagram (ERD) and/or data model
as defined in the iLab. Talk about this diagram. Be sure to list
all of your references for the information on programming
languages and database connectivity.
The Role of XML
What is XML and why is it beneficial for defining data in this
project? Go into detail about the various makeup of the XML
format. Are there alternatives to XML? How do computer
programs input and process XML files? Use week 4 to explain
XML and how it will be used in the project. This section
should be roughly 2 to 3 pages.
Data Validation
For the week 5 section of this document, describe the different
ways in which data validation can occur to ensure the integrity
of the database. First of all, why do we need data validation?
Shouldn’t we just collect the data available no matter if it is
right or wrong? At what stage should the data be validated in a
system? What are the risks of accepting bad data? Should we
reject data that is probably good if we can’t prove it is good?
How do validation considerations change when the data comes
from a file, like an XML file, versus when it comes from
interaction from a user, such as on a web page? What is the
difference between client-side and server-side validation? Can
you think of some diagrams that might help us to understand
your explanation? This section should contain about 2 pages of
analysis and a diagram or two. Remember that VISIO is your
diagraming tool friend. Remember to talk about this topic in
regards to the project being created in the iLab exercises.
Reports
How do we get the proper information to the right people? In
week 6, research the various reporting products available. For
class we will be using a very simple system for reporting

41. (abilities built into Visual Studio). Actual systems are quite
expensive and specific to certain needs. Compare and contrast
several of the reporting products available that interface with
MySQL and/or Visual Studio. Make a recommendation on
reporting software or on whether you should design your own.
Perhaps your recommendation would be a combination of both.
This section should be at least one or two pages, not counting
the comparison table that you will produce.
Integration
Week 7 will address the overall integration of the different
iLabs into a single project. What is the overall project
supposed to do? Describe the scope of the project in words and
with a well-crafted diagram or two. This section should will be
fairly short as it merely shows how all the pieces work together.
One page plus diagrams.
Testing
Also in Week 7 you should address the methods that were used
to test this system. Did you test the components AND the
whole system, or just the system? What are strategies to use in
testing? How do you prove to the stakeholders that the testing
was successful? What do you do with testing data? What do
you do if there is a testing failure?
Summary
The summary will revisit the purpose of the project and the
level of success that has been achieved. What are some of the
next steps that might be performed? Are there any weaknesses
that should be addressed? What else might be considered?
References
Place APA 6 formatted references here. See
http://library.devry.edu/pdfs/DVUO_APA_Handbook.pdf
or check the multitude of APA 6 reference material on the
Internet.