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CFI FMVA Corporate Finance Final Exam 1 Latest Update Actual Exam with 100 Questions and 100% Verified Correct Answers Guaranteed A+ Approved by the Professor$20.99
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CFI FMVA Corporate Finance Final Exam 1 Latest Update Actual Exam with 100 Questions and 100% Verified Correct Answers Guaranteed A+ Approved by the Professor
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Course
CFI FMVA Corporate Finance
Institution
CFI FMVA Corporate Finance
CFI FMVA Corporate Finance Final Exam 1 Latest Update Actual Exam with 100 Questions and 100% Verified Correct Answers Guaranteed A+ Approved by the Professor
CFI FMVA Corporate Finance Final Exam 1 Latest
Update 2024-2025 Actual Exam with 100
Questions and 100% Verified Correct Answers
Guaranteed A+ Approved by the Professor
3 years ago a company purchased a machine for 3 years project, the machine is being
depreciated straight line to zero over a 5 year period. Today the project ended and
machine was sold which one of the following correctly defines after tax salvage value of
that machine
a) sale price + (sale price - bv)(T)
b) sale price + (sale price - bv)(1-T)
c) sale price + (bv - sale price)(T)
d) sale price + (bv - sale price)(1-T)
e) sale price(1-T) - CORRECT ANSWER: c) sale price + (bv - sale price)(T)
6 year, $1000 future value bond pays semiannual interests on Feb. 1st and Aug. 1st if
today is Oct. 1st what will be the difference if any between clean and dirty prices
a) none
b) 1 month interest
c) 2 months interest
d) 4 moths interest
e) 5 months interest - CORRECT ANSWER: c) 2 months interest
7% semiannual coupon bonds are callable in 2 years at $1054 what is the amount of
the call premium on $1000 par value
a) $52
,b) $54
c) $72
d) $84
e) $89 - CORRECT ANSWER: b) $54
1054 - 1000 = 54
A company considering the installation of a new computerized pressure cooker that will
cut annual operating cost by $23000 the system will cost $39900 to purchase and install
system is expected to have 4 year life and will be depreciated to zero using straight line
depreciation what is the amount of the earnings before interest and taxes for this project
a) 10525
b) 13025
c) 15525
d) 16900
e) 19400 - CORRECT ANSWER: b) 13025
23000 - (39900/4) = 13025
A company has 950 000 shares of common stock outstanding at a market price of $38
per share. The company also has 40000 bonds outstanding that are quoted at 106% of
face value what weight should be given to debt when the company company computes
WACC
a) 42%
b) 46%
c) 50%
d) 54%
e) 58% - CORRECT ANSWER: d) 54%
A company has bonds outstanding that mature in 13 years with a 6% coupon rate
paying interest annually. The bonds have a face value of $1000 and the current market
price is $1040 what is the company's after tax cost of debt if the tax rate is 32%
a) 2.97%
b) 3.24%
c) 3.78%
d) 5.21%
e) 5.53% - CORRECT ANSWER: c) 3.78%
N= 13
PMT = .06(1000) = 60
FV = 1000
PV = -1040
CPT I/Y = 5.559
5.559(1-.32) = 3.78
A company is considering 2 projects, A consists of creating an outdoor eating area on
the unused portion of the property, B would use the property for a drive through service.
When trying to decide which project to accept the firm should rely most heavily on which
of the following
, a) profitability index
b) IRR
c) payback
d) NPV
e) ARR - CORRECT ANSWER: d) NPV
A computer company has 5.25% coupon bond outstanding with a current market price
of $546.19, the yield to maturity is 16.28 and the future value is $1000. If interest is paid
semiannually, how many years until the bonds mature
a) 6.64
b) 7.08
c) 12.41
d) 14.16
e) 28.32 - CORRECT ANSWER: b) 7.08
a) generally less than WACC given leverage of the firm
b) unaffected by changes in the market risk premium
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