Final exam mba 503 essay

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Final Exam The exam is definitely an individual hard work and should not be mentioned with others. Send the completed exam to your job folder by the last time of class. The purpose of the exam is usually to demonstrate your understanding of both written and discussion elements presented with this course. If you have any queries concerning this kind of exam, please send me an e-mail. Let me remove your name and post the question and response in the main news group. The test consists of 30 T/F questions well worth 2 details each for a total of 60 factors, 5 multiple choice worth 2 points each for a total of 10 points, two short answer questions worth 15 points each.

Good Luck! Listed here are True / False (T/F). Please response with a Big t or an F. Should you be not sure of a question and feel that it may be ambiguous, please put a quick explanation to justify the answer. Put your response on the surpass answer bed sheet, answers certainly not submitted with the answer sheet will not be deemed. You may accomplish this on up to 2 T/F problems intended for partial credit, if you make an attempt to justify a lot more than 2, I will not provide you with any credit for your aides. Your justification must be supported by a reasonable situation. ) The world wide web has had certainly not impact on financial service companies such as Meryl Lynch and Morgan Stanley F 2) The National Reserve is definitely governed by presidents with the world’s 15 largest banks. F 3) A single proprietorship is definitely taxed exactly like a corporation or perhaps LLC. Farreneheit 4) Seed money is the same as profit the bank. N 5) Downgrading expense is known as a noncash item. T 6) The publication value as well as the market value of the stock are the same amount. F 7) The conditions “merger,  “consolidation,  and “restructuring all mean the same thing. F ) The job of an auditor in a normal monetary statement examine is to see whether there is virtually any fraud present. F 9) Zero promotion bonds be issued by any sort of entity which has the ability to concern bonds. T 10) You will find 13 significant ratios in financial accounting. Farreneheit 11) You will find no differences between taxes and financial income. Farreneheit 12) Extraordinary items are items which are both irregular in event and uncommon in nature. T 13) Proforma financial statements certainly are a very accurate gage of a businesses long term income. F 14) The components of set and adjustable costs are normally the same things.

F 15) If airlines sold paint, it would cheap than in the home Depot or perhaps Lowes. N 16) Make your money back analysis is a useful tool for both significant and small businesses. T 17) Seasonal changes can have a dramatic impact on seed money. T 18) Financial influence is good to acquire in a organization because the even more debt, the better off economically a business is. F 19) An individual doing a single proprietorship data files Schedule C of Form 1040, a partnership data Form 1065, a regular (C) corporation files Form 1120, and an S corporation files Type 1120S.

Big t 20) Duty incentives are the same in every condition. F 21) The use of float is an illegal system to maximize funds balances. N 22) Underneath Check twenty-one, the banks now very clear checks need to faster. T 23) The 5 Cs of credit are figure, capital, capacity, conditions, and collateral. Farreneheit 24) The regular collection period is the A/R divided by average daily credit product sales. F 25) Just over time inventory management was developed by simply Ford Motor Company. Capital t 26) Cumulative voting privileges allow you to miss an election and vote more than once within the next election. F 7) Toxic Pills are effective means to reduce the likelihood of a hostile takeover. T 28) Cumulative desired dividends are paid initially after the bond holders and before any common stock dividends have been paid. T 29) In the current economic marketplace, borrowing via a lender represents the cheapest cost of capital to an firm. T 30) The real price of come back calculation features a component for current inflation. T Make sure you select the best answer in every single problem. In case you are not sure about a question and feel that it might be ambiguous, make sure you put a brief explanation to justify the answer.

Place your response on the stand out answer linen, answers not really submitted together with your answer bed sheet will not be regarded as. You may do that on about 2 complications for partially credit, in the event you attempt to warrant more than two, I will not give you any kind of credit for your justifications. Your justification should be supported by an affordable position. 31) Where will a administrator invest excess cash on the short term basis? A a. A short term CD m. Money Market Consideration c. National Funds g. A Lockbox System 32) LIBOR is: D a. The same as the Excellent Rate m. Tied to the banks in Europe c. Only valid for loans over 30 days. The London Interbank Offer Rate 33) The benefits of debts are: a. Interest is definitely tax insurance deductible b. Personal debt may be refunded in less expensive dollars as a result of inflation c. Debt may possibly lower the expense of capital to a firm. d. All of the previously mentioned 34) The formula for any bond yield is determined using which of the following components: A We. Annual Interest Payment II. Main Payment 3. Total Interest rates IV. Present Value of bond a. I 2 b. We III c. II IV d. III IV 35) The correlation between home finance loan on a debt instrument and the level of reliability is: C a.

The greater interest rate, the greater level of secureness b. The low interest rate, the bottom level of security c. The lower interest rate, the greater level of security d. There isn’t a practical difference in the reliability levels and interest rates in many instances. Please answer the following Article Questions. Consist of any relevant code areas necessary to support your response. 36)Kim, the president of Fulmar Firm and at the moment owns 10, 000 stocks and shares of the two hundred, 000 shares outstanding. The existing price in the stock can be $100 every share. Fulmar needs to increase an additional $1, 500, 1000 in fresh funds.

Fulmar’s income to get 2005 was $875, 500 after taxes. Interest rates are at 10%. The control and economical advisors making the effort to determine the best method to raise the extra funds and believe that inventory rights are the best option. But they are unsure of how much of a low cost would be needed and are thinking about discounts of 10%, 20% or 30%. a. For every level of discounting, determine the subscription cost, number of shares to be issued and legal rights required to buy one share. w. Compute the EPS after and before the rights with a 20% discount.. How many stocks will Kim have following the rights provide if the lady participated and bought a couple of, 000 fresh shares? You should show most computations to get total credit. Betty owns 15, 000 shares of the 200, 000 shares. Outstanding stocks and shares are one hundred ninety, 000. Current price of stock can be $100 every share. Total value of 10, 000 shares can be 10000100. Earnings after fees for Fulmar are $875, 000. Interest is 10% To raise 1, 500, 500 at $22.99 a talk about, Fulmar will have to issue 15, 000 shares. Shares exceptional are 2 hundred, 000 and 15, 1000 new ones will be offered the ratio of aged to fresh is 2 hundred, 000/15, 000=13.

So Ellie may incorporate 13 shares plus $80 to buy every share. Consequently Kim features 10, 000/13=769 shares for $80 every single = sixty one, 520 us dollars. a. At 10% price cut the registration price will be $90. Quantity of shares to be issued 1 . 5 mill/90=16667. At twenty percent discount the subscription selling price will be $80. Number of shares to be issued 1 . 5mill/80= 18750. For 30% low cost the registration price will be $70. Range of shares being issued 1 . 5 mill/70=21429. Rights needed to purchase one reveal at: 10% = doze (approximately), 20%= 10. 67 (approximately) and 30% = 9. 33 (approximately). n. Earnings per share before 20% lower price: 000 old shares at $100=200, 500. 1 fresh share for $80= $80 Total benefit of 2001 share is definitely 200, 080. EPS is usually 99. 99. The reader will be able to acquire a stock that is worth $99. 99 at $80. The differential is $19. 99. c. Betty will have 769 shares bought at $80 and 1231 shares bought at $100. Value of right 1 ) 429 1231*100=123100. 769*80=61520. 769*100=76900 123100+76900+1000000= 1200000/12000=100 123100+61520+1000000=1184620/ 1200000-1184620=15380/12000=1. 282 (Earnings per share). 37)Prepare a cash flow assertion for Collins Consulting based upon the following amounts: Sales | |550, 1000 | |CGS | |125, 000 | |Gross Revenue | |425, 000 | |Selling Admin Exp | |25, 500 | |Depreciation Exp | |150, 000 | |Operating Income | |250, 500 | |Interest Expense | |10, 000 | |Earnings Before Taxes | |240, 000 | |Taxes | |80, 1000 | |Preferred Dividends | |10, 000 | |Shares Outstanding | |120, 000 | |EPS | |$1. 5 | | | | | |Retained Income | | | |BOY Balance | |500, 000 | |CY Earnings | |150, 000 | |Div Declared Paid out CY | |50, 500 | |RE Balance EOY | |600, 000 | | | | | |Balance Piece |BOY |EOY | |Cash |70, 1000 |100, 1000 | |A/R |300, 000 |350, 500 | |Inventory |410, 1000 |430, 1000 | |Prepaid Expenses 50, 000 |30, 000 | |Total Current Assets |830, 000 |910, 000 | |Property |2, 000, 000 |2, 400, 000 | |Accum Depr |1, 1000, 000 |1, 050, 000 | |Total Assets |1, 910, 000 |2, 230, 000 | | | | | |A/P |250, 000 |440, 000 | |N/P |400, 000 |400, 000 | |Acc Expenditures |70, 1000 |50, 1000 | |Bonds Payable |70, 000 |120, 000 | |Total Liabilities |790, 500 |1, 010, 000 | | | | | |Pref Inventory |90, 000 |90, 000 | |Common Stock |120, 000 |120, 000 | |APIC (Additional Paid in Capital) |410, 000 |410, 000 | |Total YOU WILL NEED Equity |1, 120, 500 |1, 220, 000 | |Total Liab SH Value |1, 910, 000 |2, 230, 000 | Collins consulting organization Statement of money flows Money flows by operating bills: Net income (earnings after taxes)$160, 000

Adjustments to determine cash flow from operating activities: Add again depreciation($50, 000) Increase in accounts receivable($50, 000) Increase in inventory($20, 000) Decrease in prepaid expenses$20, 000 Embrace accounts payable$190, 000 Decline in accrued expenses$(20, 000) Total adjustments$270, 500 Net cash flows coming from operating activities$430, 000 Funds flows coming from investing actions: *Increase in investments (long-term)$110, 000 Embrace property($400, 000)

Net cash flow by investing activities($290, 000) Funds flows by financing activities: Increase in you possess payable$50, 1000 Preferred share dividends paid($10, 000) Common stock dividends paid($50, 000) Net funds flows via financing activities($10, 000) – Net embrace cash flows$130, 000 (430000-290000-10000) Note: *the increase in purchases was determined from the big difference of the Total assets (actual) versus total assets (stated) in the problem. Example, the total assets can be stated as $1, 910, 000 to get BOY whereas the actual computed value is usually $1, 830, 000. The difference of $80, 000 comes from the long term expenditure.

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