FIN 3403 B

Last year, your company had sales of $3.6 million, cost of goods sold of $2.3 million and operating expenses amounting to $840,000. The firm had $114,000 in depreciation expense. In addition, the firm paid 8% interest on $625,000 in bonds, received $30,00

102,200

Given an anticipated inflation premium of 1.35% and a nominal rate of interest of 5.40%, what is the real interest rate? Round your answer to 4 decimal places.

4.00%

Given an anticipated inflation premium of 1.25% and a real rate of interest of 3.75%, what is the nominal interest rate? Round your answer to 4 decimal places.

5.05%

Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's operating expenses amounted to $20 million and costs of goods sold totaled $15 million. In addition, CSS received $80,000 in dividend income, and paid $300,000 in dividends to

$7,970,900

Which of the following are tax deductible expenses for a corporation?

interest paid on debt

Dividends received by the firm:

are usually 70% excluded from taxation

What is the tax liability for a corporation with $13,600,000 in taxable income?

$4,660,000

What is the tax liability for a corporation with $13,600,000 in taxable income?

$4,660,000

What is the tax liability for a corporation with $10,800,000 in taxable income?

$3,680,000

The yield curve is typically _______.

upward sloping

The true owners of a corporation are the _______.

stockholders

The least liquid current asset is _______.

inventory

What distinguishes a public offering from a private placement?

In a public offering, all investors have the opportunity to acquire a portion of the financial claims being sold, but not so in a private placement.

The legal form of business that allows a firm to function separate and apart from its owners is the _________.

corporation

Cash available from operations after the firm pays for investments (in operating working capital and fixed assets) is called:

free cash flow

If a new security issue is marketed to a definite and select group of investors (such as current stockholders, employees or customers) the issue is called:

a privileged subscription

Since there is a virtual certainty that the U.S. government will pay interest on Treasury securities and will redeem them at face value when they mature, Treasury securities are free of any _________ risk.

default

What business type is a business owned by individual, therefore subject to a limited life and unlimited liability?

Sole proprietorship

Suppose your firm had the following taxable income amounts:
2005 ($2 million) operating loss
2006 ($2 million) operating loss
2007 ($2 million) operating loss
2008 $10 million
After you "carry forward" the operating losses, what is the effective taxable i

4 million

(Brain teaser) In a brilliant move to improve its financial strength, your company increased its debt ratio to 55% and interest expense to $15,000 per year. Sales should remain unchanged at $200,000 with an EBIT of $27,000. If your firm's total assets tur

40.0%