公司理財(英文習題).docx

Corporate Finance Class Test 2Name No. Score MarksAssessorPart:Choice Questions(15questions, 3point each, 45 points total)（Only one choice is the best for each question. Answer this part on the following table. Answers in other places will not be considered.）1234567891011121314151.An ordinary annuity is best defined by which one of the following?A.increasing payments paid for a definitive period of timeB.increasing payments paid foreverC.equal payments paid at regular intervals over a stated time periodD.equal payments paid at regular intervals of time on an ongoing basis2.Your credit card company charges you 1.65 percent interest per month. What is the annual percentage rate on your account?A.18.95 percent B.19.80 percentC.20.90 percent D.21.25 percent3.What is the effective annual rate if a bank charges you 9.50 percent compounded quarterly?A.9.62 percent B.9.68 percentC.9.72 percent D.9.84 percent4Mary just purchased a bond which pays $60 a year in interest. What is this $60 called?A.coupon B.face valueC.discount D.call premium5.Bert owns a bond that will pay him $75 each year in interest plus a $1,000 principal payment at maturity. What is the $1,000 called?A.coupon B.face valueC.discount D.yield6.Currently, the bond market requires a return of 11.6 percent on the 10-year bonds issued by Winston Industries. The 11.6 percent is referred to as which one of the following?A.coupon rate B.face rateC.call rate D.yield to maturity7.All else constant, a bond will sell at _ when the coupon rate is _ the yield to maturity.A.a premium; less than B.a premium; equal toC.a discount; less than D.a discount; higher than8.Which one of the following bonds is the least sensitive to interest rate risk?A.3-year; 4 percent coupon B.3-year; 6 percent couponC.5-year; 6 percent coupon D.7-year; 6 percent coupon9.A 6-year, $1,000 face value bond issued by Taylor Tools pays interest semiannually on February 1 and August 1. Assume today is October 1. What will the difference, if any, be between this bonds clean and dirty prices today?A.no difference B.one months interestC.two months interest D.four months interest10.Miller Brothers Hardware paid an annual dividend of $1.15 per share last month. Today, the company announced that future dividends will be increasing by 2.6 percent annually. If you require a 12 percent rate of return, how much are you willing to pay to purchase one share of this stock today?A.$12.23 B.$12.55C.$12.67 D.$12.7211.A projects average net income divided by its average book value is referred to as the projects average:A.net present value. B.internal rate of return.C.accounting return. D.profitability index.12.The internal rate of return is defined as the:A.maximum rate of return a firm expects to earn on a project.B.rate of return a project will generate if the project in financed solely with internal funds.C.discount rate that equates the net cash inflows of a project to zero.D.discount rate which causes the net present value of a project to equal zero.13A project has an initial cost of $6,500. The cash inflows are $900, $2,200, $3,600, and $4,100 over the next four years, respectively. What is the payback period?A.1.73 years B.2.51 yearsC.2.94 years D.3.51 years14.Which of the following should be included in the analysis of a new product?I. money already spent for research and development of the new productII. reduction in sales for a current product once the new product is introducedIII. increase in accounts receivable needed to finance sales of the new productIV. market value of a machine owned by the firm which will be used to produce the new productA.I and III onlyB.II and IV onlyC.I, II, and III onlyD.II, III, and IV only15.The Coffee Express has computed its fixed costs to be $0.34 for every cup of coffee it sells given annual sales of 212,000 cups. The sales price is $1.49 per cup while the variable cost per cup is $0.63. How many cups of coffee must it sell to break-even on a cash basis?A.83,814 B.96,470C.123,910 D.167,630MarksAssessorPart III: Calculation Questions (2 questions, 55 points total)1. (1) Compute the price of a 5% coupon bond, 20 years left to maturity, a market interest rate of 6%. (Assume coupons are paid annually, face value is $1000.) (15points)( P/A,5%,20) =12.4622 ( P/S,5%,20) = 0.3769( P/A,6%,20) =11.4699 ( P/S,6%,20) = 0.3118 (2) Is this a discount or premium bond? (5points)2. Your company is considering replace an existing machinery. The equipment will cost $450,000. It will save $125,000 (before taxes) a year by reducing operating costs. The life of the equipment is 4 years with zero salvage. Straight-line method is used to depreciate. The equipment is worth of $250,000 at the end of year 4. The tax rate is 34%. The required return is 17%. 1) How much is the operating cash flow for year1- 4?( 10 points)2) How much is after-tax salvage value at t