Question 73 (1 point) A firm has Days in Inventory of 56 days, DSO of 32 days, a

Question

Question 73 (1 point)

A firm has Days in Inventory of 56 days, DSO of 32 days, and Days in Payables of 68 days. It's cash Conversion Cycle is ____ days.

Question 73 options:

20

70

50

80

Question 74 (1 point)

A bond matures in exactly 12 years. It has a par value of $1,000, a coupon rate of 5.6%, and makes two interest payments per year. If the market rate of interest were to be 5.8%, what would the value of the bond be?

Question 74 options:

983

1,013

979

some other amount

Question 75 (1 point)

A firm is considering only 2 projects, both of which have a positive NPV. The firm only has enough capital to invest in one project. The firm should select the project with the shortest payback period.

Question 75 options:

True

False

Question 77 (1 point)

A firm's WACC is often referred to as the 'hurdle rate' for new project profitability. All new projects must earn at least the firm WACC in order to add value to the company.

Question 77 options:

True

False

Question 76 (1 point)

Bank A offers a higher interest rate than Bank B. If you want to deposit a single amount of money today and have it grow to $10,000 in 5 years, you would have to deposit less money in Bank B than you would have to in Bank A in order to achieve your goal.

Question 76 options:

True

False

Question 77 (1 point)

A firm's WACC is often referred to as the 'hurdle rate' for new project profitability. All new projects must earn at least the firm WACC in order to add value to the company.

Question 77 options:

True

False

Question 78 (1 point)

A bank account pays 5.80% APR with monthly compounding. What is the Effective Annual Rate ('Yield') of this account?

Your Answer:

Question 79 (1 point)

Our U.S. company has an account payable denominated in JPY, and an account receivable denominated in CHF. The risk we face in respect to these is that:

Question 79 options:

the USD appreciates against the JPY and the USD depreciates against the CHF.

both the JPY and CHF appreciate against the USD by the same amount

the JPY depreciates and the CHF appreciates against the USD.

the JPY appreciates, and the CHF depreciates against the USD.

Question 80 (1 point)

You invest $5900 in a savings account earning 4.30% with monthly compounding. How many years will it take for that amount to grow to $19400. Round your answer to the nearest whole number.

Your Answer:

20

70

50

80

Explanation / Answer

Answer 73 Cash conversion cycle = Days in Inventory + Days sales outstanding - Days in Payables Cash conversion cycle = 56 days + 32 days - 68 days = 20 days Answer 75 The statement is True. Answer 76 The statement is False. Answer 77 The statement is True. Answer 78 Effective annual rate = [(1+APR/12)^12] - 1 = [(1+0.0580/12)^12] - 1 = 0.059567 i.e.5.96% Answer 79 The risk we face in respect to these is that:he JPY appreciates, and the CHF depreciates against the USD. Answer 80 We can use the Future value of sum formula to calculate the no.of years it will take to grow investment of $5900 to $19400 Future value of sum = P * (1+r)^n Future value of sum = $19400 P = Sum invested = $5900 r = rate of interest per month = 4.30% /12 = 0.003583 19400 = 5900 * (1+0.003583)^n n = 332 No.of years = 332 months / 12 = 28 years

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