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1. (TCO 1) Which of the following statements is not true regarding the goal of financial management? (Points: 3), a. The goal of maximizing the value per share of existing stock is relevant to all organizations. , b.A way of aligning management goals to shareholder’s interest is to tie managerial compensation to the market value of the firm’s stock. , c.For a company considering international operations, the goal will be the same but the company will have to consider the local social, economical and political environment in the decision-making process. , d.All of the above are true. ,,,2. (TCO 1) Market value is important to the financial manager because: (Points: 3), a.It reflects the value of the asset based on generally-accepted accounting principles. , b.Is a crucial component of the balance sheet and can impact the financial statements. , c.Market values reflect the amount someone is willing to pay today for an asset. , d.The market value of an asset reflects its historical cost. ,,,3. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:,Cost of goods sold…………………………. $1.2 million ,Administrative expenses…………………… $250,000,Marketing and selling expenses…………… $175,000,Depreciation…………………………………. $500,000,Interest expense……………………………. $200,000,Dividends paid………………………………. $150,000 ,(TCO 1) Suppose that Sports Baseball has 20,000 shares of stock. What is the dividends per share figure?,,(Points: 3), 5.0 , 8.75 , 7.50 , 5.50 ,,,4. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:,Cost of goods sold…………………………. $1.2 million ,Administrative expenses…………………… $250,000,Marketing and selling expenses…………… $175,000,Depreciation…………………………………. $500,000,Interest expense……………………………. $200,000,Dividends paid………………………………. $150,000 ,(TCO 1) Assuming a tax rate of 30%, what is the EBIT and taxable income for the year?,,(Points: 3), $1,000,000 and $800,000 respectively , $575,000 and $375,000 respectively , $565,000 and $365,000 respectively , $425,000 and $225,000 respectively , None of the above ,,,5. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:,Cost of goods sold…………………………. $1.2 million ,Administrative expenses…………………… $250,000,Marketing and selling expenses…………… $175,000,Depreciation…………………………………. $500,000,Interest expense……………………………. $200,000,Dividends paid………………………………. $150,000 ,(TCO 1) Select all items that will be included in Sports Baseballs, Inc. Income Statement. For this exercise you will be choosing more than one option for your answer: ,,(Points: 3), Accounts receivable , Cost of goods sold , Net working capital , Interest expense , Taxes , Current assets , Short-term loans , Cash on hand , Inventory ,,, 6. (TCO 1) Which one of the following activities best exemplify capital structure decisions. For this exercise you will be choosing more than one option for your answer: (Points: 6), Determine the most adequate mixture of debt and equity to be maintained. , Obtain a short-term loan to purchase materials. , Identify two capital investment projects. , Determine the cost of each source of capital. , Determine the return of a potential project. , Calculate the cash flows for a project. , Assess the terms of loans and evaluate potential long-term financing options. ,, ,

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