QUESTION 1

How many years will it take $100 to grow to $1,000 with an annual interest rate of 8 percent?

1. 29.92 years
2. 10.00 years
3. 9.00 years
4. 33.35 years

QUESTION 2

Last year Mocha Java, Inc. had an ROA of 10 percent, a profit margin of 5 percent, and sales of $25 million. What is Mocha Java's total assets?

1. $0.125m.
2. $12m.
3. $12.5m.
4. $1.25m.

QUESTION 3

You are evaluating the balance sheet for Epic Corporation. From the balance sheet you find the following balances:

cash and marketable securities = $500,000, accounts receivable = $200,000, inventory = $100,000, accrued wages and taxes = $50,000, accounts payable = $60,000, and notes payable = $200,000. Calculate Epic's net working capital.

1. $690,000
2. $800,000
3. $490,000
4. $540,000

QUESTION 4

A firm has EBIT of $1,000,000 and depreciation expense of $400,000. Fixed charges total $600,000. Interest expense totals $70,000. What is the firm's fixed-charge coverage ratio?

1. 1.00 times
2. 1.67 times
3. 2.45 times
4. 2.33 times

QUESTION 5

Which is true? Ratio analysis

1. can provide useful information on a firm's current position but should never be used to forecast future performance.
2. can provide useful information on a firm's past but not current position.
3. can provide useful information on a firm's current position and hint at future performance.
4. can provide useful information on a firm's past and current position, but should never be used to forecast future performance.

QUESTION 6

A firm has EBIT of $400,000 and depreciation expense of $20,000. Fixed charges total $50,000. Interest expense totals $7,000. What is the firm's cash coverage ratio?

1. 8.40 times
2. 8.00 times
3. 8.54 times
4. 7.60 times

QUESTION 7

Valeriya has two options for investing her $10,000 in savings:

Bank 1 offers a Certificate of Deposit with a 4.8% interest rate compounded annually.

Bank 2 also offers a Certificate of Deposit with a 4.8% interest rate, but the compounded monthly.

At over 8 years, how much more interest will Valeriya earn at Bank 2 than at Bank 1? Enter your answer rounded to the nearest dollar, without the "$".

QUESTION 8

What annual rate of return is earned on a $200 investment when it grows to $850 in 10 years?

1. 3.25 percent
2. 13.47 percent
3. 15.57 percent
4. 4.25 percent

QUESTION 9

Approximately how many years does it take to double a $300 investment when interest rates are 8 percent per year?

1. 0.11 years
2. 11 years
3. 9 years
4. 4.17 years

QUESTION 10

Compute the present value of $3,000 paid in four years using the following discount rates: 3 percent in year 1, 4 percent in year 2, 5 percent in year 3, and 6 percent in year 4.

1. $2,109.14
2. $1,998.73
3. $2,491.28
4. $2,516.26