Reference no: EM132554693
Question 1: A firm's dividend policy refers to all of the following except to its choice of
Select one:
A. whether to pay shareholders a cash dividend
B. who should receive a cash dividend.
C. how large the cash dividend should be
D. how frequently a cash dividend should be distributed.
Question 2: The following data are projected for a possible investment project:
Revenue Cost of Goods sold Depreciation EBIT
1 $120,000 $36,000 $80,000 $4,000
2 $140,000 $42,000 $60,000 $38,000
3 $160,000 $48,000 $40,000 $72,000
4 $180,000 $54,000 $20,000 $106,000
The project requires an initial investment of $300,000. Working capital is anticipated to be variable at 10% of revenues; the working capital investment must be made at the beginning of each period, and will be recaptured in full at the end of year 4. The tax rate is 40%.
What is the initial cash outlay?
Select one:
A. $312,000
B. $220,000
C. $232,000
D. $300,000
Question 3: Goods with $300 are sold on account for terms '2.5/8, net 30'. The cost of forgoing the cash discount in this instance would be:
Select one:
A. 40%
B. 38%
C. 43%
D. 62%
Question 4: Which of the following statements is FALSE?
A. Once a capital project is approved, the role of a financial manager is still essential
B. Capital projects are a long term investment
C. Capital projects are difficult to reverse
D. Ideas for investment projects stem mainly from the firm's finance department.
Question 5: KaiViti is a Fijian biotechnology company that develops vaccinations. It needs to raise $40 million to fund new research. It has 20 million ordinary shares on issue, and these are currently selling on the SPSE for $15.50.
The directors decide to make a 1-for-5 rights issue at $10 subscription. What is the theoretical ex-rights price?
A. $14.58
B. $4.58
C. $10
D. $15.50