Mid-term I Review Questions 1. In December 1994 the government of Mexico officially changed the value of the Mexican peso from 3.2 pesos per dollar to 5.5 pesos per dollar. What was the percentage change in its value? Was this a depreciation‚ devaluation‚ appreciation‚ or revaluation? Explain. 2. Many people were surprised when Vietnam became the second largest coffee producing country in the world in recent years‚ second only to Brazil. The Vietnamese dong‚ VND or d‚ is managed against the
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Important Microeconomic Formulas Total Product = Quantity (Q) Average Product (AP) = Total Product (Q) / Labour (L) Marginal Product (MP) = Change in Total Product / Change in Labour Profit = Total Revenue (TR) – Total Costs (TC) Profit = (Average Revenue – Average Cost) x Quantity Total Revenue (TR) = Price (P) x Quantity (Q) Total Costs (TC) = Total Fixed Costs (TFC) + Total Variable Costs (TVC) Total Cost (TC) = Average Cost (AC) x Quantity (Q) Average Cost (AC) = Total Costs (TC) /
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(1.3) Goal of firm C M | Answer: a | MEDIUM | The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to | | | | | | | | | | a. | Maximize the stock price per share over the long run‚ which is the stock’s intrinsic value. | b. | Maximize the firm’s expected EPS. | c. | Minimize the chances of losses. | d. | Maximize the firm’s expected total income. | e. | Maximize the stock price on a specific target date. | (1.3) Corporate
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Econ 371: Answer Key for Problem Set 1 (Chapter 12-13) Instructor: Kanda Naknoi September 14‚ 2005 1. (2 points) Is it possible for a country to have a current account deficit at the same time and has a surplus in its balance of payments? Explain your answer using hypothetical figures. ANSWER: (1 point) Yes. The balance of payments (BoP) is the sum of current account (CA)‚ capital account (KA) and financial account (FA). Theoretically‚ because of the double-entry bookkeeping practice‚ the sum
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ACCG927 CURRENT ISSUES IN ACCOUNTING & Corporate Governance Week 1 Introduction and Overview of Accounting Theories 1 Introduction • • • • • • • • • • About the unit Teaching and learning strategy Assessments In-class essays Essay writing workshop Research essay Turnitin requirements Oral team presentation Required readings Importance of written answers each week 2 The Nature of Accounting & Corporate Governance Theory • What is a theory? Kerlinger‚ 1964: "A set of interrelated
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FINAL EXAM 1. The accounting measure of a firm’s equity value generated by applying accounting principles to asset and liability acquisitions is called ________. A. book value 2. New-economy companies generally have higher _______ than old-economy companies. B. P/E multiples 3. Earnings yields tend to _______ when Treasury yields fall. A. fall 4. A firm that has an ROE of 12% is considering cutting its dividend payout. The stockholders of the firm desire a dividend yield of 4% and a capital
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Problem 1 A stock sells for $10 per share. You purchase 100 shares for $10 a share (i.e.‚ for $1000)‚ and after a year the price rises to $17.50. What will be the percentage return on your investment if you bought the stock on margin and the margin requirement was (a) 25 percent‚ (b) 50 percent‚ and (c) 75 percent? (Ignore commissions‚ dividends‚ and interest expense.) Initial Stock price per share $10 # of Shares Purchased 100 New Stock price per share $17.50 Gain = New Price - Initial
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Ratio Description The company Inventory turnover An activity ratio calculated as revenue divided by inventory. Rio Tinto PLC’s inventory turnover deteriorated from 2010 to 2011 and from 2011 to 2012. Receivables turnover An activity ratio equal to revenue divided by receivables. Rio Tinto PLC’s receivables turnover improved from 2010 to 2011 but then slightly deteriorated from 2011 to 2012. Payables turnover An activity ratio calculated as revenue divided by payables. Rio Tinto PLC’s payables
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QUESTION 1: 1. If the first deposit is at 36 years and the last expected deposit is at 65 years‚ then annual deposits will be made for 30 years. Expected annual withdrawals are $90‚000 for 15 years from the retirement fund with a bank that offers compound interest of 8% annually. Calculation Present value (PV) =? Future value (FV) = (90‚000*15) = $1‚350‚000 Periodic payment amount (PMT) =? Interest rate per period (Rate) = 8% or 0.08 Number of payment periods (Nper) = 30 Using the Excel
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Chapter 22: Dividend Policy Multiple Choice Questions 1. When is the ex-dividend date if the holder of record date is April 14‚ 2006? A. April 15 B. April 16 C. April 12 D. April 13 Level of difficulty: Medium Solution: C Ex-dividend date is the second business date before the holder of record date. 2. Which of the following statements about M&M assumptions is false? A. There are no taxes. B. Not all firms maximize value. C. There is no debt. D. Markets are perfect. Level of difficulty:
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