中山大学财务管理期末试卷(英语)2

K1+478～K1+5888段左侧片石混凝土挡土墙第1部分K1+478～K1+5888段左侧片石混凝土挡土墙第1部分页脚内容PAGE页脚内容K1+478～K1+5888段左侧片石混凝土挡土墙第1部分页脚内容FINANCIALMANAGEMENTEXAMINATION(2)Time:2HoursMarks:A.Defineandbrieflyexplaineachofthefollowingterms(10points)1.FreeCashFlow2.MarketRisk3.InternalRateofRaturn4.CAPM5.BreakevenAnalysisB.MultipleChoiceQuestions(40points)1.BusinessescanbeorganizedasA)soleproprietorshipsB)partnershipsC)corporationsD)anyoftheabove2.Limitedliabilityisanimportantfeatureof:A)SoleproprietorshipsB)PartnershipsC)CorporationsD)Alloftheabove3.Infinance,"shortterm"meansA)lessthanthreemonthsB)lessthansixmonthsC)lessthanoneyearD)lessthanfiveyears4.Conflictsofinterestbetweenshareholdersandmanagersofafirmresultin:A)PrincipalagentproblemB)IncreasedagencycostsC)BothAandBD)Noneoftheabove5.Thefinancialgoalofacorporationisto:A)MaximizesalesB)MaximizeprofitsC)MaximizethevalueofthefirmfortheshareholdersD)Maximizemanagers'benefits6.Ifthepresentvalueof$480expectedtobereceivedoneyearfromtodayis$400,whatisthediscountrate?A)10%B)20%C)30%D)Noneoftheabove7.Ifthepresentvalueofacashflowgeneratedbyaninitialinvestmentof$100,000is$120,000,whatistheNPVoftheproject?A)$120,000B)$20,000C)$100,000D)Noneoftheabove8.Therearetworeasonsfordiscountingfuturecashflow.Theyare:A)Adollartodayisworthmorethanadollartomorrow(forpositiveinterestrates)B)AsafedollarisworthmorethanariskyoneC)ThevalueofadollarischangingallthetimeD)AandBabove9.Thefinancialgoalofacorporationisto:A)MinimizestockholderwealthB)MaximizeprofitC)MaximizevalueofthecorporationtothestockholdersD)Noneoftheabove10.Thevarianceorstandarddeviationisameasureof:A)TotalriskB)UniqueriskC)MarketriskD)Noneoftheabove11.IfthepresentvalueofthecashflowXis$200,andthepresentvaluecashflowY$150,thanthepresentvalueofthecombinedcashflowis:A)$200B)$150C)$50D)$35012.Whatisthepresentvalueof$10,000peryearperpetuityataninterestrateof5%?A)$10,000B)$100,000C)$200,000D)Noneoftheabove13.AnannuityisdefinedasA)EqualcashflowsatequalintervalsoftimeforeverB)EqualcashflowsatequalintervalsoftimeforaspecificperiodC)UnequalcashflowsatequalintervalsoftimeforeverD)Noneoftheabove14.Ifthepresentannuityfactoris3.89,whatisthepresentvalueannuityfactorforanequivalentannuitydueiftheinterestrateis9%?A)3.57B)4.24C)3.89D)Noneoftheabove.15.Thevalueofacommonstocktodaydependson:A)NumberofsharesoutstandingandthenumberofshareholdersB)TheWallStreetanalystsC)TheexpectedfuturedividendsandthediscountrateD)Presentvalueofthefutureearningspershare16.SuperComputerCompany'sstockissellingfor$100persharetoday.Itisexpectedthatthisstockwillpayadividendof5dollarspershare,andthenbesoldfor$120pershareattheendofoneyear.Calculatetheexpectedrateofreturnfortheshareholders.A)20%B)25%C)10%D)15%17.McomCo.isexpectedtopayadividendof$4pershareattheendofyearoneandthedividendsareexpectedtogrowataconstantrateof4%forever.Ifthecurrentpriceofthestockis$25persharecalculatedtherequiredrateofreturnorthemarketcapitalizationrateforthefirms'stock.A)4%B)16%C)20%D)Noneoftheabove.18.Whichofthefollowinginvestmentrulesdoesnotusethetimevalueofthemoneyconcept?A)ThepaybackperiodB)InternalrateofreturnC)NetpresentvalueD)Alloftheaboveusethetimevalueconcept19.Thenetpresentvalueofaprojectdependsupon:A)forecastedcashflowsandopportunitycostofcapitalB)manager'stastesandpreferencesC)company'schoiceofaccountingmethodD)alloftheabove20.Themainadvantageofthepaybackruleis:A)AdjustmentforuncertaintyofearlycashflowsB)ItissimpletouseC)DoesnotdiscountcashflowsD)BothAandCC.True/FalseQuestions(20points)TF1.Onedistinctivefeatureofacorporationisthatthereisnoseparationofownershipandcontrol.TF2.Inasoleproprietorship,theownerisalsothemanager,andhence,agencycostsareataminimum.TF3.Thediscountrate,hurdlerateoropportunitycostofcapitalallmeanthesame.TF4.Therateofreturnonaperpetuityisequaltothecashflowdividedbytheprice.TF5.Therelationshipbetweennominalinterestrateandrealinterestrateisgivenby:1+rnominal=(1+rreal)(1+inflationrate)TF6.Compoundinterestassumesthatyouarereinvestingtheinterestpaymentsattherateofreturn.TF7.Ateachpointintime,allsecuritiesinanequivalentriskclassarepricedtoofferthesameexpectedreturn.TF8.Thepaybackrulegivesequalweighttoallcashflowsbeforethepaybackdateandzeroweighttosubsequentcashflows.TF9.TheIRRrulestatesthatfirmsshouldacceptanyprojectofferinganinternalrateofreturninexcessofthecostofcapital.TF10.Donotforgettoincludeinterestanddividendpaymentswhencalculatingtheproject'scashflow.TF11.Depreciationactsasataxshieldinreducingthetaxes.TF12.RiskpremiumisthedifferencebetweenthesecurityreturnandtheTreasurybillreturn.TF13.Diversificationreducesriskbecausepricesofdifferentsecuritiesdonotmoveexactlytogether.TF14.Betaofawelldiversifiedportfolioisequaltothevalueweightedaveragebetaofthesecuritiesincludedintheportfolio.TF15.Investorsaremainlyconcernedwiththoserisksthatcanbeeliminatedthroughdiversification.TF16.Thecompanycostofcapitalisthecorrectdiscountrateforanyprojectundertakenbythecompany.TF17.Riskyprojectscanbeevaluatedbydiscountingcertaintyequivalentcashflowsattheriskfreeinterestrate.TF18.Riskyprojectscanbeevaluatedbydiscountingtheexpectedcashflowsatariskadjusteddiscountrate.TF19.Firmsthatbreakevenonanaccountingbasisarereallylosingtheopportunitycostofcapitalontheirinvestments.TF20.Projectswithhighfixedcostshavehigherbreakevenpoints.D.Answerthefollowingquestions(30points)1.Respondtothefollowingcomment:“It'sallverywelltellingcompaniestomaximizenetpresentvalue,but‘netpresentvalue’isjustanabstractnotion.WhatItellmymanagersisthatprofitsarewhatmattersandIt'sprofitsthatwe'regoingtomaximize.”2.Whatisthenetpresentvaluerule?Whatistherateofreturnrule?Dothetworules