STR 581 Week 4 Capstone Exam - Latest 2015

23. Horizontal analysis is also known as:
24. A cost which remains constant per unit at various levels of activity is a:
25. The break-even point is where:
26. The convention of consistency refers to consistent use of accounting principles:
27. Your firm has an equity multiplier of 2.47. What is the debt-to-equity ratio?
28. Turnbull Corp. had an EBIT of $247 million in the last fiscal year. Its depreciation and amortization
expenses amounted to $84 million. The firm has 135 million shares outstanding and a share price of $12.80.
A competing firm that is very similar to Turnbull has an enterprise value/EBITDA multiple of 5.40.What is the
enterprise value of Turnbull Corp.? Round to the nearest million dollars.
29. Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently
selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the
most recent year? (Round to the nearest percent.)
30. An unrealistic budget is more likely to result when it:
31. In a process cost system, product costs are summarized:
32. Ajax Corp. is expecting the following cash flows - $79,000, $112,000, $164,000, $84,000, and $242,000 –
over the next five years. If the company’s opportunity cost is 15 percent, what is the present value of these
cash flows? (Round to the nearest dollar.)
33. Firms that achieve higher growth rates without seeking external financing:
34. Regatta, Inc., has six-year bonds outstanding that pay a 8.25 percent coupon rate. Investors buying the
bond today can expect to earn a yield to maturity of 6.875 percent. What should the company’s bonds be
priced at today? Assume annual coupon payments. (Round to the nearest dollar.)
35. How firms estimate their cost of capital: The WACC for a firm is 13.00 percent. You know that the firm’s
cost of debt capital is 10 percent and the cost of equity capital is 20% What proportion of the firm is financed
with debt?
36. Variance reports are:
37. The accumulation of accounting data on the basis of the individual manager who has the authority to
make day-to-day decisions about activities in an area is called:
38. Next year Jenkins Traders will pay a dividend of $3.00. It expects to increase its dividend by $0.25 in
each of the following three years. If their required rate of return if 14 percent, what is the present value of
their dividends over the next four years?
39. The cash conversion cycle?