FIN 370 - FIN 370 Final Exam Questions & Answers at UOP E Tutors

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11) When firms use multiple sources of capital, they need to calculate the appropriate discount rate for valuing their firm's cash flows as__________. they apply to each asset as they are purchased with their respective forms of debt or equity a sum of the capital components costs a simple average of the capital components costs a weighted average of the capital components costs 12) You are trying to pick the least-expensive machine for your company. You have two choices: machine A, which will cost $50,000 to purchase and which will have OCF of -$3,500 annually throughout the machine's expected life of three years; and machine B, which will cost $75,000 to purchase and which will have OCF of -$4,900 annually throughout that machine's four-year life. Both machines will be worthless at the end of their life. If you intend to replace whichever type of machine you choose with the same thing when its life runs out, again and again out into the foreseeable future, and if your business has a cost of capital of 14 percent, which one should you choose? Neither machine A nor B Both machines A and B Machine B Machine A 13) Financial plans include which of the following? All of the above Pro forma Income Statement, Balance Sheet Short Term and Long Term Plan Schedule of Sales, Expenses, and Capital Expenditure
14) Which of these statements is true regarding divisional WACC? Using a simple firmwide WACC to evaluate new projects would give an unfair advantage to projects that present less risk than the firm's average beta. Using a divisional WACC versus a WACC for the firm's current operations will result in quite a few incorrect decisions. Using a simple firmwide WACC to evaluate new projects would give an unfair advantage to projects that present more risk than the firm's average beta. Using a firmwide WACC to evaluate new projects would have no impact on projects that present less risk than the firm's average beta. 15) Which of these provide a forum in which demanders of funds raise funds by issuing new financial instruments, such as stocks and bonds? Investment banks Secondary markets Primary markets Money markets 16) What are reasons for the firm to go abroad? Lower production cost All of the above Diversification Access to raw materials 17) The top part of Mars, Inc.'s 2013 balance sheet is listed as follows (in millions of dollars). What are Mars, Inc.'s current ratio, quick ratio, and cash ratio for 2013? 4.2, 1.0, 0.2 2.3333, 0.5556, 0.1111
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FIN 370 - FIN 370 Final Exam Questions & Answers at UOP E Tutors

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