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1.1. A firm's current ratio is below the industry average; however, the firm's quick ratio is above the industry average. These ratios suggest that the firm
| A. |
has relatively more total current assets and even more inventory than other firms in the industry |
|
| B. |
has liquidity that is superior to the average firm in the industry |
|
| C. |
has relatively less total current assets and less inventory than other firms in the industry |
|
| D. |
is near technical insolvency |
|
| E. |
is very efficient at managing inventories |
2,The present value of growth opportunities (PVGO) is equal to
I) the difference between a stock's price and its no-growth value per share.
II) the stock's price.
III) zero if its return on equity equals the discount rate.
IV) the net present value of favourable investment opportunities.
| A. |
III and IV |
|
| B. |
II and IV |
|
| C. |
I and IV |
|
| D. |
I, III, and IV |
|
| E. |
II, III, and IV |
2. what would you have if you sold everything you owned and paid all your deft? financial management and controlling.
3. You inherit $434,000. You can receive the $434,000 in one lump sum payment today or, alternatively, receive two amounts: $234,000 in 11 months and $220,000 in 21 months from today. If you can earn 11.6% per annum compounding monthly on your monies, what is the value of the option to receive two payments (in present day value)?
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