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Test Bank Fundamentals of Corporate Finance, 13th Edition 2024 Release by Stephen Ross | Algorithmic Test Questions CA$28.05   Add to cart
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Test Bank Fundamentals of Corporate Finance, 13th Edition 2024 Release by Stephen Ross | Algorithmic Test Questions
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  • Corporate Finance
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  • Corporate Finance

Test Bank for Fundamentals of Corporate Finance,13e 13th Edition 2024 Release by Stephen Ross, Randolph Westerfield and Bradford Jordan | Algorithmic Test Questions. These are EXTRA PRACTICE questions for this test bank and given for below chapters. Complete test bank is given in Package deal of t...

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  • August 25, 2024
  • 578
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • fundamentals
  • corporate finance
  • 13e
  • 2024
  • release
  • ross
  • algorithmic
  • questions
  • test bank

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  • Corporate Finance
  • Corporate Finance

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Chapter 02 - Algo


1. Award: 10.00 points




A firm has common stock of $89, paid-in surplus of $260, total liabilities of $405, current assets of
$380, and net fixed assets of $590. What is the amount of the shareholders' equity?


 $970

 $525

 $754

 $185

 $565



Shareholders' equity = Current assets + Net fixed assets − Total liabilities.
Shareholders’ equity = $380 + 590 − 405 = $565


References

Multiple Choice Learning Objective:
02-01 Describe the
difference between
accounting value (or
book value) and
market value.


Difficulty: 1 Basic Section: 2.1 The
Balance Sheet

,2. Award: 10.00 points




Recently, the owner of Martha's Wares encountered severe legal problems and is trying to sell her
business. The company built a building at a cost of $1,190,000 that is currently appraised at
$1,390,000. The equipment originally cost $670,000 and is currently valued at $417,000. The
inventory is valued on the balance sheet at $360,000 but has a market value of only one-half of that
amount. The owner expects to collect 97 percent of the $200,200 in accounts receivable. The firm
has $11,200 in cash and owes a total of $1,390,000. The legal problems are personal and unrelated
to the actual business. What is the market value of this firm?


 $597,000

 $802,394

 $1,182,594

 $1,542,594

 $982,394



Market value = $1,390,000 (building) + 417,000 (equipment) + (.5 × $360,000) (inventory) + (.97 ×
$200,200) (accounts receivable) + 11,200 cash − 1,390,000 (amount owed)
Market value = $802,394


References

Multiple Choice Learning Objective:
02-01 Describe the
difference between
accounting value (or
book value) and
market value.


Difficulty: 1 Basic Section: 2.1 The
Balance Sheet

,3. Award: 10.00 points




Ivan's, Incorporated, paid $468 in dividends and $579 in interest this past year. Common stock
increased by $189 and retained earnings decreased by $115. What is the net income for the year?


 $353

 $468

 $932

 $579

 $768



Net income = Dividends paid + Change in retained earnings
Net income = $468 + (− $115) = $353

In this case, the change in retained earnings was a negative value.


References

Multiple Choice Learning Objective:
02-02 Describe the
difference between
accounting income
and cash flow.


Difficulty: 1 Basic Section: 2.2 The
Income Statement

, 4. Award: 10.00 points




A firm paid taxes of $48,290 for the year. What is the average tax rate for the firm if it had taxable
income of $199,800?
rev: 09_11_2023_QC_HETS-11423


 29.00%

 26.59%

 24.17%

 30.21%

 21.75%



Average tax rate = $48,290.00 ÷ $199,800
Average tax rate = .2417, or 24.17%


References

Multiple Choice Learning Objective:
02-03 Describe the
difference between
average and
marginal tax rates.


Difficulty: 1 Basic Section: 2.3 Taxes

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