Fin 515 Midterm Exam Finance Three Questions Midterm Exam

FINANCE THREE QUESTIONS MIDTERM EXAM FIN 515 MIDTERM EXAMQuestion 1. Question : (TCO G) The firm's equity multiplier measures Student Answer: the value of assets held per dollar of shareholder equity. the return the firm has earned on its past investments. the firm's ability to sell a product for more than the cost of producing it. how efficiently the firm is utilizing its assets to generate sales. Instructor Explanation: Chapter 2 Points Received: 10 of 10 Comments: Question 2. Question : (TCO G) The DuPont Identity expresses the firm's ROE in terms of Student Answer: profitability, asset efficiency, and leverage. valuation, leverage, and interest coverage. profitability, margins, and valuation. equity, assets, and liabilities. Instructor Explanation: Chapter 2 Points Received: 10 of 10 Comments: Question 3. Question : (TCO B) You plan on retiring in 20 years. You currently have $275,000 and think you will need $1,000,000 to retire. Assuming you dont deposit any additional money into the account, what annual return will you need to earn to meet this goal? Student Answer: N = 20 PV = $275,000 FV = $1,000,000 CPT for i/y i/y = 6.67% If; I planned to retire in 20 and I dont deposit any additional