财务管理其中考试题英文.docx

1、财务管理其中考试题英文 财务管理其中考试题（英文）1. Finance, generally, deals with A) money B) markets C) people D) all of the above Answer: D2. Generally, a corporation is owned by the: A) Managers B) Board of Directors C) Shareholders D) All of the above. Answer: C3. The following are examples of real assets except: A) M

2、achinery B) Common stock C) Office buildings D) Inventory Answer: B4. In finance, short-term means A) less than three months B) less than six months C) less than one year D) less than five years Answer: C 17. The treasurer usually oversees the following functions of a corporation except: A) Preparat

3、ion of financial statements B) Investor relationships C) Cash management D) Obtaining finances Answer: AType: DifficultPage: 6 18. The treasurer is usually responsible the following functions of a corporation except: A) Raising new capital B) Cash management C) Banking relationships D) Internal acco

4、unting Answer: D 20. The controller usually oversees the following functions of a corporation except: A) Cash management B) Tax management C) Internal accounting D) Preparation of financial statements Answer: A 22. The following are advantages of separation of ownership and management of corporation

5、s except: A) Corporations can exist forever. B) Facilitate transfer of ownership without affecting the operations of the firm. C) Hire professional managers D) Incur agency costs Answer: D 24. The financial goal of a corporation is to: A) Maximize sales B) Maximize profits C) Maximize the value of t

6、he firm for the shareholders D) Maximize managers benefits Answer: C 26. In the principal-agent framework: A) Shareholders are the principals B) Managers are the agents C) Shareholders are the agents D) Managers are the principals E) A and B Answer: E T F 30. A corporation has a legal existence of i

7、ts own and is based on articles of incorporation. Answer: True 4. Present value of $110,000 expected to be received one year from today at an interest rate (discount rate) of 10% per year is: A) $121,000 B) $100,000 C) $110,000 D) None of the above Answer: BType: EasyPage: 14 Response: PV = (110,000

8、) / (1.1) = 100,000 5. One year discount factor at a discount rate of 10% per year is: A) 1.1 B) 1.0 C) 0.909 D) None of the above Answer: CType: EasyPage: 14 Response: Discount Factor = 1/1.1 = 0.909 6. Present Value of $100,000 expected to be received at the end of one year at a discount rate of 1

9、00% per year is: A) $50,000 B) $200,000 C) $100,000 D) None of the above Answer: AType: EasyPage: 14 Response: PV = (100,000) / (1+1) = 50,000 7. The one-year discount factor at an interest rate of 25% per year is: A) 1.25 B) 0.8 C) 0.25 D) None of the above Answer: BType: EasyPage: 14 Response: Dis

10、count factor = 1/(1.25) = 0.8 10. If the one-year discount factor is 0.85, what is the present value of $120 to be received one year from today? A) $100 B) $102 C) $141.18 D) None of the above Answer: BType: MediumPage: 14 Response: PV = (120)(0.85) = 102 20. If the five-year present value annuity f

11、actor is 3.791 and four-year present value annuity factor is 3.170, what is the present value at the $1 received at the end of five years? A) $0.621 B) $1.61 C) $0.315 D) None of the above Answer: AType: DifficultPage: 39 Response: PV = (3.791 3.170)*(1) = 0.621 21. If the three-year present value a

12、nnuity factor is 2.723 and two-year present value annuity factor is 1.859, what is the present value of $1 received at the end of the 3 years? A) $0.157 B) $0.864 C) $1.00 D) None of the above Answer: BType: DifficultPage: 39 Response: PV = (2.723-1.859) *(1) = 0.864 22. What is the present value an

13、nuity factor at a discount rate of 13% for 10 years? A) $5.4262 B) $8.514 C) $8.13 D) None of the above Answer: AType: MediumPage: 39 Response: PV annuity factor = (1/0.13) (1/(0.13)(1.1310) = 5.4262 23. What is the present value annuity factor at an interest rate of 11% for 5 years? A) 8.514 B) 6.1

14、45 C) 3.6959 D) None of the above Answer: CType: MediumPage: 39 Response: PV annuity factor = (1/0.11) (1/(0.11)(1.115) = 3.695933. If the present value of $1.00 received n years from today at an interest rate of r is 0.270, then what is the future value of $1.00 invested today at an interest rate o

15、f r% for n years? A) $1.00 B) $3.70 C) $1.70 D) Not enough information to solve the problem Answer: BType: DifficultPage: 40 Response: FV = 1/(0.270) = 3.70 34. If the future value of $1 invested today at an interest rate of r% for n years is 2.5937, what is the present value of $1 to be received in

16、 n years at r% interest rate? A) $0.3855 B) $1.00 C) $0.621 D) None of the above Answer: AType: DifficultPage: 40 Response: PV = 1/2.5937 = 0.3855541. Mr. Hopper is expected to retire in 30 years and he wishes accumulate $1,000,000 in his retirement fund by that time. If the interest rate is 12% per

17、 year, how much should Mr. Hopper put into the retirement fund each year in order to achieve this goal? A) $4,143.66 B) $8,287.32 C) $4,000 D) None of the above Answer: AType: DifficultPage: 40 Response: Future value annuity factor = (1/0.12) (1/(0.12*1.1230)*(1.1230) = 241.3827; payment = 1,000,000

18、/241.3327 = 4143.66 42. Mr. Hopper is expected to retire in 30 years and he wishes accumulate $750,000 in his retirement fund by that time. If the interest rate is 10% per year, how much should Mr. Hopper put into the retirement fund each year in order to achieve this goal? A) $4,559.44 B) $2,500 C)

19、 $9,118.88 D) None of the above Answer: AType: DifficultPage: 40 Response: Future value annuity factor = (1/0.10) (1/(0.10*1.1030)*(1.1030) = 164.494; payment = 750,000/164.494 = 4559.44 43. If you invest $100 at 12% APR for three years, how much would you have at the end of 3 years using simple int

20、erest? A) $136 B) $140.49 C) $240.18 D) None of the above Answer: AType: MediumPage: 40 Response: FV = 100 + (100*0.12*3) = $1362. If a firm permanently borrows $50 million at an interest rate of 8%, what is the present value of the interest tax shield? Assume a 35% tax rate. A) $8.00 million B) $8.

21、75 million C) $17.50 million D) $25.00 million E) None of the above Answer: CType: MediumPage: 490 Response: PV of interest tax shield = (0.35)(50) = $17.5 million 3. If a firm borrows $25 million for one year at an interest rate of 10%, what is the present value of the interest tax shield? Assume a

22、 35% tax rate. (Approximately.) A) $1.591 million B) $1.75 million C) $1.00 million D) $5.00 million E) None of the above Answer: AType: DifficultPage: 490 Response: PV of interest tax shield = (0.35)(50)(0.1)/1.1 = $1.591 5. If the before-tax cost of debt is 10% and the corporate tax rate is 30%, c

23、alculate the after-tax cost of debt: A) 10% B) 3% C) 7% D) none of the above Answer: CType: EasyPage: 525 6. A firm has a total value of $1 million and debt valued at $400,000. What is the after-tax weighted average cost of capital if the after - tax cost of debt is 12% and the cost of equity is 15%

24、? A) 13.5% B) 13.8% C) 27.0% D) Its impossible to determine the WACC without debt and equity betas Answer: BType: MediumPage: 525 Response: WACC = 0.4(0.12) + 0.6(0.15) = 0.048 + 0.09 = 0.1387. The CR Corp. maintains a debt-equity ratio of 0.5 The cost of equity for CR Corp. is 15% and the after-tax

25、 cost of debt is 9%. What is the after-tax weighted average cost of capital? A) 11.86% B) 12.00% C) 13.00% D) None of the above Answer: CType: MediumPage: 525 Response: (1/3)(9) + (2/3)(15) = 13% 8. A firm is financed with 50% risk-free debt and 50% equity. The risk-free rate is 10%, the firms cost

26、of equity capital is 20%, and the firms marginal tax rate is 35%. What is the firms weighted average cost of capital? A) 13.25% B) 10.00% C) 20.00% D) None of the above Answer: AType: MediumPage: 525 Response: (0.50)(1-0.35)(10) + (0.5)(20) = 13.25 10. A firm is financed with 40% risk-free debt and

27、60% equity. The risk-free rate is 7%, the firms cost of equity capital is 18%, and the firms marginal tax rate is 35%. What is the firms weighted average cost of capital? A) 18.00% B) 7.00% C) 13.60% D) 12.62% E) None of the above Answer: DType: MediumPage: 525 Response: (0.4)(1-0.35)(7) + (0.6)(18)

28、 = 12.62% 11. Which of the following statements characterize(s) the weighted average cost of capital formula? A) It requires knowledge of the required return on the firm if it is all-equity financed B) It is based on book values of debt and equity C) It assumes the project is a carbon copy of the fi

29、rm D) It can be used to take account of issue costs and other such financing side effects Answer: CType: DifficultPage: 526 12. A firm is financed with 30% risk-free debt, 60% common equity and 10% preferred equity. The risk-free rate is 5%, the firms cost of common equity is 15%, and that of prefer

30、red equity is 10%. The marginal tax rate is 30%. What is the firms weighted average cost of capital? A) 10.05% B) 11.05% C) 12.5% D) None of the above Answer: BType: DifficultPage: 526 Response: (0.3)(1-0.3)(5) + (0.6)(15) + (0.1)(10) = 11.05 13. When the amount of debt is fixed, present value of tax-shield is calculated using: A) cost of debt B) cost of equity C) cost of capital D) none of the above Answer: AType: MediumPage: 527