davenport finc620 week 3 quiz
by ella | Mar 26, 2024 | Finance
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estion 1
2 out of 2 points
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Which of the following is NOT a
key element in strategic planning as it is described in the text?
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Question 2
2 out of 2 points
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A company expects sales to increase during the
coming year, and it is using the AFN equation to forecast the additional
capital that it must raise. Which of the following conditions would cause the
AFN to increase?
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Question 3
2 out of 2 points
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Which of the following is NOT one
of the steps taken in the financial planning process?
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Question 4
2 out of 2 points
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Spontaneous funds are generally defined as
follows:
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Question 5
2 out of 2 points
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Which of the following statements is CORRECT?
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Question 6
2 out of 2 points
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Jefferson City Computers has developed a
forecasting model to estimate its AFN for the upcoming year. All else being
equal, which of the following factors is most likely to lead to an increase of
the additional funds needed (AFN)?
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Question 7
2 out of 2 points
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Which of the following statements is CORRECT?
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Question 8
2 out of 2 points
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Last year Wei Guan Inc. had $350 million of
sales, and it had $270 million of fixed assets that were used at 65% of
capacity. In millions, by how much could Wei Guan’s sales increase before it
is required to increase its fixed assets?
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Question 9
2 out of 2 points
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Clayton Industries is planning its operations for next year, and
Ronnie Clayton, the CEO, wants you to forecast the firm’s additional funds
needed (AFN). The firm is operating at full capacity. Data for use in your
forecast are shown below. Based on the AFN equation, what is the AFN for the
coming year? Dollars are in millions.
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Last year’s sales = S0
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$350
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Last year’s accounts payable
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$40
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Sales growth rate = g
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30%
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Last year’s notes payable
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$50
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Last year’s total assets = A0*
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$500
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Last year’s accruals
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$30
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Last year’s profit margin = PM
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5%
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Target payout ratio
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60%
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Question 10
2 out of 2 points
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Last year Jain Technologies had $250 million of
sales and $100 million of fixed assets, so its FA/Sales ratio was 40%.
However, its fixed assets were used at only 75% of capacity. Now the company
is developing its financial forecast for the coming year. As part of that
process, the company wants to set its target Fixed Assets/Sales ratio at the
level it would have had had it been operating at full capacity. What target
FA/Sales ratio should the company set?
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Question 11
2 out of 2 points
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Howton & Howton Worldwide (HHW) is planning its operations for the
coming year, and the CEO wants you to forecast the firm’s additional funds
needed (AFN). The firm is operating at full capacity. Data for use in the
forecast are shown below. However, the CEO is concerned about the impact of a
change in the payout ratio from the 10% that was used in the past to 50%,
which the firm’s investment bankers have recommended. Based on the AFN
equation, by how much would the AFN for the coming year change if HHW
increased the payout from 10% to the new and higher level? All dollars are in
millions.
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Last year’s sales = S0
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$300.0
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Last year’s accounts payable
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$50.0
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Sales growth rate = g
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40%
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Last year’s notes payable
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$15.0
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Last year’s total assets = A0*
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$500.0
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Last year’s accruals
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$20.0
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Last year’s profit margin = PM
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20.0%
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Initial payout ratio
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10.0%
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Question 12
2 out of 2 points
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Which of the following statements is CORRECT?
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Question 13
2 out of 2 points
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The term “additional funds needed
(AFN)” is generally defined as follows:
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Question 14
2 out of 2 points
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Last year Emery Industries had $450 million of
sales and $225 million of fixed assets, so its FA/Sales ratio was 50%.
However, its fixed assets were used at only 65% of capacity. If the company
had been able to sell off enough of its fixed assets at book value so that it
was operating at full capacity, with sales held constant at $450 million, how
much cash (in millions) would it have generated?
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Question 15
2 out of 2 points
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Last year Handorf-Zhu Inc. had $850 million of
sales, and it had $425 million of fixed assets that were used at only 60% of
capacity. What is the maximum sales growth rate the company could achieve
before it had to increase its fixed assets?
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