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Satisfactory Essays
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Exam 1 FIN370 Fall 2011 – Version B Key

1. You are analyzing a company that has cash of $2,000, accounts receivable of $3,700, fixed assets of $10,900, accounts payable of $6,600, and inventory of $4,100. What is the quick ratio?
a. 1.48
B. .86
c. 3.30
d. .67
e. .30

BLOOMS TAXONOMY QUESTION TYPE: APPLICATION
LEARNING OBJECTIVE NUMBER: 2
LEVEL OF DIFFICULTY: BASIC
Ross - Chapter 003 #45
SECTION: 3.2
TOPIC: QUICK RATIO
TYPE: PROBLEMS

2. Solomon, Inc. has net sales of $745,100 and costs of $590,800. The depreciation expense is $82,600 and the interest paid is $15,500. What is the amount of the firm's operating cash flow if the tax rate is 35 percent?
a. $46,605
b. $52,030
c. $71,700
D. $134,630
e. $105,720

BLOOMS TAXONOMY …show more content…

You want to invest an amount of money today and receive back twice that amount in the future. You expect to earn 6 percent interest. Approximately how long must you wait for your investment to double in value?
a. 6 years
b. 10 years
c. 9 years
D. 12 years
e. 8 years

BLOOMS TAXONOMY QUESTION TYPE: KNOWLEDGE
LEARNING OBJECTIVE NUMBER: 4
LEVEL OF DIFFICULTY: BASIC
Ross - Chapter 004 #27
SECTION: 4.3
TOPIC: RULE OF 72
TYPE: CONCEPTS

10. You have $2,000 today and want to quadruple your money in 10 years. What interest rate must you earn?
a. 23.11 percent
b. 11.61 percent
c. 20.13 percent
d. 7.18 percent
E. 14.87 percent

BLOOMS TAXONOMY QUESTION TYPE: APPLICATION
LEARNING OBJECTIVE NUMBER: 3
LEVEL OF DIFFICULTY: BASIC
Ross - Chapter 004 #50
SECTION: 4.3
TOPIC: INTEREST RATE
TYPE: PROBLEMS

11. Which one of the following actions will decrease the current ratio, all else constant? Assume the current ratio is greater than 1.0.
a. collecting payment from a customer
B. purchasing inventory on credit
c. selling inventory at a profit in a charge sale
d. paying an account payable
e. selling inventory at cost in a cash sale

BLOOMS TAXONOMY QUESTION TYPE: APPLICATION
LEARNING OBJECTIVE NUMBER: 2
LEVEL OF DIFFICULTY: INTERMEDIATE
Ross - Chapter 003 #11
SECTION: 3.2
TOPIC: CURRENT RATIO
TYPE: CONCEPTS

12. Today, you deposit $10,750 in a bank account that pays 3 percent simple interest. How much interest will you earn over the next 7 years?
a.

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