Which financial statement reports the amounts of cash that the firm generated and distributed during a particular time period?
statement of retained earnings
Statement of cash flows
Which of these provide a forum in which demanders of funds raise funds by issuing new financial instruments, such as stocks and bonds?
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
10.5, 6.0, 1.0
0.1111, 0.5556, 0.2
Which of these ratios show the combined effects of liquidity, asset management, and debt management on the overall operation results of the firm?
As new capital budgeting projects arise, we must estimate__________.
the cost of the stock being sold for the specific project
when such projects will require cash flows
the cost of the loan for the specific project
the float costs for financing the project
What’s the current yield of a 6 percent coupon corporate bond quoted at a price of 101.70?
We call the process of earning interest on both the original deposit and on the earlier interest payments:
Which financial statement reports a firm’s assets, liabilities, and equity at a particular point in time?
Statement of retained earnings
Statement of cash flows
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
When firms use multiple sources of capital, they need to calculate the appropriate discount rate for valuing their firm’s cash flows as__________.
a simple average of the capital components costs
a weighted average of the capital components costs
a sum of the capital components costs
they apply to each asset as they are purchased with their respective forms of debt or equity
Which of these is used as a measure of the total amount of available cash flow from a project?
Operating cash flow
Investment in operating capital
Free cash flow
Sunk cash flow
Which of these does NOT perform vital functions to securities markets of all sorts by channeling funds from those with surplus funds to those with shortages of funds?