Mgmt 640 Financial Decision Making for Managers Midterm Exam Essay

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Financial Decision Making for Managers
Midterm Exam

The Midterm Exam is individual work. All work on the exam should be from your own efforts, with no assistance from classmates, family, friends or others. By proceeding with this exam, you are agreeing not to share the exam content or your responses with anyone, including future students of MGMT640. (Upload your answer sheet and
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& Equity $ 19,795 $ 20,610

______ 5. What is the change in net working capital from 2014 to 2015?
a. $4,015
b. $1,335
c. -$1,200
d. -$3,405 ______ 6. Further Along, Inc. had earnings after tax (EAT) of $320,000 last year. Its expenses included depreciation of $55,000, interest of $40,000. It purchased new equipment for $20,000.
The company also sold stock for $40,000. What is Ship-to-Shore’s net cash flow for last year?
a. $380,000 c. $315,000
b. $425,000 d. $395,000 ______ 7. GenTech Pharma has reported the following information: Sales/Total Assets = 2.17 ROA = 12.74% ROE = 21.58%
What is the firm’s profit margin and debt ratio? a. 4.3%; 1.90 c. 3.7%; 1.90
b. 5.9%; 0.41 d. 3.7%; 0.47
______ 8. B.J. Industries has sales of $3,000, total assets of $2,500 and a profit margin of 5%. The firm has a total debt ratio of 40%. What is the return on equity?
a. 6% c. 10%
b. 8% d. 12% ______9. You are comparing two investment options. The cost to invest in either option is the same today. Both options provide you with $20,000 of income. Option A pays five annual payments of $4,000 each. Option B pays five annual payments starting with $8,000 the first year followed by four annual payments of $3,000 each. Which one of the following statements is correct given these two investment options?
a. Both options are of equal value given that