Assignment:
Question 1. Corporate shareholders are same members of Management team.
a True
b False
Question 2. PV is higher in value than FV.
a Never
b Some time
c Always
d can not be decided
Question 3. Low credit rating bonds are called: "Premium Bonds":
a True
b False
Question 4. Which of the following is NOT a property of a sole proprietorship?
A) Ease of setup
B) Single taxation
C) No separation of ownership and control
D) Limited liability
Question 5. Sales for a firm are $600,000, cost of goods sold are $400,000, and interest expenses are $25,000. What is the gross profit margin?
A) 66.67%
B) 25.0%
C) 20.0%
D) 16.0%
E) 4.0%
Question 6. When making a decision using NPV, the following is correct( 1 answer only):
a. NPV = PV(Benefits) - PV (Costs)
b. NPV = 1 + r , where r is the rate of return
c. none is correct
d. NPV = FV / (1+r)^n
Question 7. Three types of directors in a corporate board are:
a. General Manager, Financial Manager and Operations Manager.
b. None
c. CEO, CFO and COO.
d. Inside directors, Grey directors and Independent directors.
Question 8. Callable bonds, are in favor of Bond Issuer:
a True
b False
Question 9. FV formula includes
a. Interest rate and compounding periods
b. interest rate
c. PV
d. FV
Question 10. Management team of corporation consists of:
a. Shareholders
b. CFO & COO
c. Board of directors
d. CEO
Question 11 What is the return on equity if net income was $60,000, total assets are $120,000, EBIT was $120,000, and equity is $80,000?
A) 63.1%
B) 47.8%
C) 73.3%
D) 75.0%
E) 55.0%
Question 12 In bonds Coupon rate, is calculated annually, and paid monthly mostly:
a True
b False
Question 13. In Bonds, Face value is not necessarily same as Buying Price
a True
b False
Question 14. The ________ is a snapshot of the firm at a particular point in time.
A) income statement
B) None of the above
C) balance sheet
D) statement of cash flows
E) statement of retained earnings
Question 15. In a corporation, the ultimate decisions regarding business matters are made by:
A) shareholders.
B) debt holders.
C) investors.
D) the Board of Directors.
Question 16. In finance, the following risk - return rule is correct:
a. none
b. High risk ---> Low return
c. Low risk ---> High return
d. Low risk ---> Low return
Question 17. Time value of money is behind the existence of interest rate concept.
a True
b False
Question 18. On a board composed of insider, gray and independent directors, the role of watch dog belongs to:
a. Independent directors
b. Grey director
c. Insider director
d. All directors
Question 19. What type of company trades on an organized stock exchange?
A) A private company
B) A limited liability company
C) An Limited Liability Company
D) A public company
Question 20. If you buy shares of Apple Corp. on the secondary market:
A) Apple Corp. receives the money because the company has issued new shares.
B) you buy the shares from the Federal Reserve.
C) you buy the shares from another investor who decided to sell the shares.
D) you buy the shares from the New York Stock Exchange.
Please note that this final exam is for the Corporate Finance of Business Administration course. A brief explanation of the answers is acceptable just to minimize the time of answering the questions.