1. You have invested $5,000 in an investment with an expected return of 8 percen
ID: 2723038 • Letter: 1
Question
1. You have invested $5,000 in an investment with an expected return of 8 percent and $15,000 in an investment with an expected return of 16 percent. What is your expected return on this portfolio? A.10% B.12% C.14% D.16%
2. Petra, Inc. has $400,000 in current assets, $1.25 million in plant and equipment, and $250,000 in goodwill. In what order should these assets be reported on the balance sheet?
there is no correct ordering of these assets on the balance sheet
goodwill, plant and equipment, current assets
current assets, plant and equipment, goodwill
plant and equipment, currents assets, goodwill
3. A higher discount rate will __________.
decrease the present value of a future cash flow
increase the present value of a future cash flow
decrease the future value of a future cash flow
not affect the present value of a future cash flow
4. Why is the quick ratio considered by some to be a better measure of liquidity than the current ratio?
The quick ratio more accurately reflects a firm's profitability.
The quick ratio omits the least liquid current asset from the numerator of the ratio.
The current ratio does not include accounts receivable.
The quick ratio measures how "quickly" cash flows through the firm.
5. Which of the following is the goal of the firm?
tax payment maximization
shareholder wealth maximization
profit maximization
revenue maximization
6. Last year, Kowalski Bearings Company had total net sales of $10,000,000, inventories of $2,250,000, cash and equivalents of $750,000, and day’s sales outstanding (DSO) of 73 days. What is the company's accounts receivable balance if there are 365 days in a year?
there is no correct ordering of these assets on the balance sheet
goodwill, plant and equipment, current assets
current assets, plant and equipment, goodwill
plant and equipment, currents assets, goodwill
Explanation / Answer
expected return = (5000/20000)*8%+(15000/20000)*16%=14%
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