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Why is maximization of the current value per share a more appropriate financial management goal than profit maximization? (Points: 3), Because by maximizing the current stock value you also maximize the company’s profit for the year. , Because this criterion is non-ambiguous. , Because financial managers always act in the best interest of shareholders. , B and C ,,,2. (TCO 1) Market values reflect which of the following: (Points: 3), The amount someone is willing to pay today for an asset. , The value of the asset based on generally-accepted accounting principles. , The asset’s historical cost. , A and B only ,,,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 30,000 shares of stock. What is the dividends per share figure?,,(Points: 3), 5.0 , 8.75 , 5.25 , 8.50 ,,,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. Balance Sheet. 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 , Notes payable , Cash on hand , Consulting revenues ,,, 6. (TCO 1) Which one of the following activities best exemplify working capital management. For this exercise you will be choosing more than one option for your answer: (Points: 6), Identify three good investment opportunities for the firm. , Obtain a short-term loan to purchase materials. , Assess the level of inventory to be kept on hand. , Sale long-term bonds to raise funds for a new machine. , Determine the return of a potential project. , Calculate the cash flows for a project. , Manage payments to suppliers. ,,, 7. (TCO 1) Match the following terms with the examples as appropriate: (Points: 4), ,Matching:,,Answer Potential Matches: ,: Insider trading 1: McDonald’s work to redesign packaging items with recyclable materials. ,2: Microsoft’s monopolistic behavior.,3: Martha Stewart’s sale of ImClone stock as result of information provided by the company’s CEO before an announcement was made public that significantly decrease ImClone’s stock price. ,4: Parmalat’s deliberate fraudulent accounting practices. ,5: established an oversight board responsible for improving auditing standards within companies., ,: Social responsibility ,: Sarbanes-Oxley Act ,: Fraud ,: Antitrust case ,,,8. (TCO 1) Which incentives do managers have to act in the stockholder’s interest? Name two and explain each in one or two sentences. (Points: 5),

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