Preview

Interest and Answer Score Explanation

Satisfactory Essays
Open Document
Open Document
1583 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Interest and Answer Score Explanation
Quiz Feedback

file:///C:/Documents and Settings/Administrator/Рабочий стол/index.html

Skip Navigation This page features MathJax technology to render mathematical formulae. If you are using a screen reader, please visit MathPlayer to download the plugin for your browser. Please note that this is an Internet Explorer-only plugin at this time.

Introduction to Finance
Feedback — Assignment 9
You have submitted this Assignment on Wed 26 Sep 2012 8:58:18 PM EEST. You achieved a score of 90.00 out of 100.00. Please read all questions and instructions carefully. Note that you only need to enter answers in terms of numbers and without any symbols (including $, %, commas, etc.). Enter all dollars without decimals and all interest rates in percentage with up to two decimals. Read the syllabus for examples.The points for each question are listed in parentheses at the start of the question, and the total points for the entire assignment adds up to 100.

Question 1
(5 points) In a world with no frictions (i.e., taxes, etc.), having debt is always better because it increases the value of the firm/project. Your Answer Score Explanation Correct 5.00 Correct. You understand the irrelevance of financing. False. Total 5.00 / 5.00 Question Explanation Fundamental question about value creation.

Question 2
(5) The return of equity is equal to the return on debt of a project/firm Your Answer Score Explanation Correct. Equity is always riskier. Never true. Correct 5.00 Total 5.00 / 5.00 Question Explanation Financing's effects on equity.

Question 3
(10 points) Moogle, Inc. is in the same business as Google, Inc., but has recently retired all its debt to become an all-equity firm. Its return on equity has dropped from 12.25% to 10.60% as a result of this. Google, Inc. continues to have debt in its capital structure, and its debt-to-equity ratio is 30%. What is the return on assets of Google, Inc.(No more than two decimals in the percentage interest rate, but do not

You May Also Find These Documents Helpful

  • Satisfactory Essays

    3) Increase in debt automatically will increase in risk generally. Debt requires to be paid back, interest will be added to the principal if we fail to pay it on time, and could also lead to bankruptcy. Debt to equity ratio is to measure the risk of the company.…

    • 402 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Fi516 Advanced Finance

    • 1337 Words
    • 6 Pages

    (e) The total value of the firm is independent of the amount of debt it uses. (Points: 20)…

    • 1337 Words
    • 6 Pages
    Good Essays
  • Satisfactory Essays

    Complete the following graded homework assignment in a Word document named “ FIN515_Homework2_yourname ." Show the details of your calculation/work in your answer to the problems .…

    • 685 Words
    • 6 Pages
    Satisfactory Essays
  • Good Essays

    EGT1 Task 3

    • 1171 Words
    • 5 Pages

    The rate of return on total assets is the next ratio. This is calculated by taking net income and adding interest expense; then dividing them by average total assets. This ratio measures a business’s success in using their assets to earn a profit. In 2011, the ratio was 12.30% and in 2012 it was 14.28%. This was a pretty good rise and sits well with the industry averages of 17.20 to 8.60%. I would say this is a strength as well for Company…

    • 1171 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Oroton Group

    • 1451 Words
    • 6 Pages

    In 2005, the company had a return on owner’s equity of 2.39%. Therefore for every dollar that the shareholders had invested in the company they got a return of 2.39 cents for their dollar. In 2005, the company had a return on total assets of 2.83%. So for every dollar the company had in assets in 2005, the company would get a return of 2.83 cents on their assets.…

    • 1451 Words
    • 6 Pages
    Powerful Essays
  • Satisfactory Essays

    Mgt 5000

    • 350 Words
    • 2 Pages

    4. A firm has total assets of $523,100, current assets of $186,500, current liabilities of $141,000, and total debt of $215,000. What is the debt-equity ratio?…

    • 350 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Forensic Accounting Quiz

    • 459 Words
    • 2 Pages

    5. Which financial ratio shows the return on all of the assets under its control regardless of source of financing? return on investment…

    • 459 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Mid Term Exam

    • 2499 Words
    • 10 Pages

    13. You are considering a stock investment in one of town firms (A and B) both of which operate in the same industry. A finances it’s $20 million in assets with $18 million in debt and $2 million in equity. B finances it’s $20 million in debt and $18 million in equity. Calculate the debt to equity ratio for the two firms?…

    • 2499 Words
    • 10 Pages
    Powerful Essays
  • Satisfactory Essays

    *Try your best. This is not a math course and we will not answer math related questions.…

    • 268 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    4.) Please refer to my calculations in the sheet named “Question #4”. The rate of return for the debt scenario is 1756%. The rate of return for the equity scenario…

    • 548 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    FIN 370 Final Exam

    • 667 Words
    • 2 Pages

    12) If you have $20,000 in an account earning 8% annually, what constant amount could you withdraw each year and have nothing remaining at the end of 5 years?13) At what rate must $400 be compounded annually for it to grow to $716.40 in 10 years?14) The present value of a single future sum15) Which of the following is considered to be a spontaneous source of financing?16) Compute the payback period for a project with the following cash flows, if the company’s discount rate is 12%. Initial outlay = $45017) For the NPV criteria, a project is acceptable if the NPV is __________, while for the profitability index, a project is acceptable if the profitability index is __________.18) Which of the following is considered to be a deficiency of the IRR?19) The firm should accept independent projects if20) The most expensive source of capital is21) The cost associated with each additional dollar of financing for investment projects is22) The XYZ Company is planning a $50 million expansion. The expansion is to be financed by selling $20 million in new debt and $30 million in new common stock. Fin 370 final exam. The before-tax required rate of return on debt is 9%, and the required rate of return on equity is 14%. If the company is in the 40% tax bracket, what is the…

    • 667 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    10) The interest charged on a $200,000 note payable, at a rate of 6%, on a 2-month note would be…

    • 697 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Time Value

    • 253 Words
    • 2 Pages

    6. a. What is the annual percentage rate (APR) on a loan that charges interest of .75 percent per month?…

    • 253 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    Examadms4540

    • 1331 Words
    • 6 Pages

    Name: Student ID: Section: AK/ADMS 4540 Financial Management Fall 2011 Exam 2 Part 1 Instructor: Dr. William Lim Time Limit: 1.5hours…

    • 1331 Words
    • 6 Pages
    Powerful Essays
  • Satisfactory Essays

    Personal Finance

    • 291 Words
    • 1 Page

    This Section Review covers Sections 1-3 of the Personal Finance Course. You will need to use the information found in those sections as well as your completed assignments to answer these questions. Each question is worth 5 points for a total of 100 points.…

    • 291 Words
    • 1 Page
    Satisfactory Essays