FINC 600 FINC600 Week 2 Practice Quiz Answers (APU)

FINC 600 FINC600 Week 2 Practice Quiz Answers (APU)

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FINC600 Week 2 Practice Quiz (APUS)

  1. If the Wall Street Journal Quotation for a company has the following values close: 55.14; Net chg: = + 1.04; then the closing price for the stock for the previous trading day was? 
  2. The value of a common stock today depends on: 
  3. Company X has a P/E ratio of 10 and a stock price of $50 per share. Calculate earnings per share of the company. 
  4. Which of the following stocks is/are a growth stock(s)? 
  5. Universal Air is a no growth firm and has two million shares outstanding. It is expected to earn a constant 20 million per year on its assets. If all earnings are paid out as dividends and the cost of capital is 10%, calculate the current price per share for the stock. 
  6. Which of the following investment rules does not use the time value of the money concept? 
  7. The following are measures used by firms when making capital budgeting decisions except: 
  8. Which of the following investment rules has value adding-up property? 
  9. Internal rate of return (IRR) method is also called: 
  10. Profitability index is the ratio of: 
  11. When a firm has the opportunity to add a project that will utilize excess factory capacity (that is currently not being used), which costs should be used to determine if the added project should be undertaken? 
  12. The cost of a resource that may be relevant to an investment decision even when no cash changes hand is called a (an): 
  13. Net Working Capital should be considered in project cash flows because: 
  14. If the discount rate is stated in nominal terms, then in order to calculate the NPV in a consistent manner requires that project:
    I) cash flows be estimated in nominal terms
    II) cash flows be estimated in real terms 
  15.          III) accounting income be used 
  16. For example, in the case of an electric car project, which of the following cash flows should be treated as incremental flows when deciding whether to go ahead with the project? 

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