Online Access Free Financial-Management Exam Questions

In the capital asset pricing model (CAPM), what does a beta (#) greater than 1 signify for a portfolio?

• A.The portfolio will always outperform the market.
• B.The portfolio has more risk than the market.
• C.The portfolio has less risk than the market.
• D.The portfolio is expected to move in the opposite direction of the market.

Rusty RoboTech, a robotics technology company, has provided the following financial information for the year 20X3:
* Sales Revenue: $500,000
* Net Income: $50,000
* Dividend Payout: 40% of Net Income
* Total Assets at the beginning of 20X3: $300,000
* Total Liabilities at the beginning of 20X3: $150,000
* Equity at the beginning of 20X3: $150,000
* Historical Cash-to-Sales Ratio: 5%
* Accounts Receivable-to-Sales Ratio: 15%
* Inventory-to-Sales Ratio: 25%
* Cost of Goods Sold-to-Sales Ratio: 43%
For the year 20X4, Rusty RoboTech projects a 20% increase in sales revenue. Other ratios and the dividend policy are expected to remain the same.
What is the projected inventory value for Rusty RoboTech at the beginning of 20X4?

• A.$150,000
• B.$130,000
• C.$120,000
• D.$140,000

What are opportunity costs in the context of inventory management?

• A.Costs of not investing capital tied up in inventory elsewhere
• B.Costs incurred from the physical space used to store inventory
• C.Costs related to the insurance of inventory against loss or damage
• D.Costs for the labor involved in managing inventory levels

What is a consequence of a firm having a longer cash cycle?

• A.Immediate increase in net income
• B.Increased need to hold cash for operations
• C.Decreased need to hold cash
• D.Instantaneous improvement in liquidity

Why might a firm use a combination of methods to calculate the cost of common equity?

• A.To focus exclusively on dividend policies
• B.To comply with regulatory requirements
• C.To account for one method being significantly more complex
• D.To achieve a more accurate and comprehensive estimate