Harvard Finance and Accounting questions

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5.
Which of the following ratios appears on a common-size balance sheet? 

     I. Debt to asset ratio 
     II. Net working capital to total assets 
     III. Net profit margin
  • 10.

    Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. Use this information to answer question 10.

    A 15% increase in inventory turns for Toys by Tom, Inc. would bring this ratio to ____, suggesting ________ in ________.

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      11.
      The cash cycle measures the days required to produce finished goods or delivered services.
      • 13.
        The sustainable growth rate is the maximum growth rate achievable over an extended period of time.
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          14.
          The cash conversion cycle is calculated as:
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            15.
            Which of following are sources of cash in a statement of sources and uses? 

                 I. Collection of accounts receivables 
                 II. Reduction of long-term debt 
                 III. Payment of dividends 
                 IV. Reduction in the cash account
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              16.
              Which of the following actions, all else being equal, will increase the sustainable growth rate?
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                17.
                Biases can and should always be eliminated in financial forecasts.
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                  18.
                  Which of the following is commonly forecasted as a percent of sales:
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                    19.
                    External funding needs are computed as:
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                      20.
                      A perpetuity is a stream of cash flows that lasts forever.
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                        21.
                        The higher the opportunity cost of capital the higher the NPV.
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                          22.
                          A project with an internal rate of return greater than the cost of capital should always be accepted.
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                            23.
                            The phenomenon of compounding connotes which of the following?
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                              24.
                              If you invest $2,000 today for three years at 5% interest paid annually, you will earn a total of $_____ in interest. Assume you re-invest all interest.
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                                25.
                                Enterprise Free Cash Flows should include: 

                                     I. Capital expenditures 
                                     II. Financing costs 
                                     III. Taxes 
                                     IV. Working capital requirements
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                                  26.
                                  You are trying to decide whether to accept or reject a one-year project. The project is estimated to generate $5,000 in incremental gross profit, which includes $200 in depreciation. Incremental SG&A expense is $400. At a 35% tax rate, the after-tax incremental cash flow is:
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                                    27.
                                    You are saving money for a down payment on a house. Suppose you want to have total savings of $20,000 in 10 years time and you have currently $5,000. What annual interest rate do you need to earn on your initial investment, assuming you contribute no additional savings?
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                                      28.
                                      What is the present value of a growing perpetuity that makes a payment of $100 in the first year, which thereafter grows at 3% per year? Apply a discount rate of 7%.
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      • 6 years ago
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