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Question 1

after tax cost of debt

Answer 1

yeild to maturity rate or market rate or pretax cost of debt* (1-tax rate)

Question 2

A/R turnover

Answer 2

sales(net)/AVG A/R (net)

Question 3

days sales in A/R

Answer 3

End. A/R (net)/Sales (net) / 365 “ Avg sales per day”

Question 4

A/P turnover

Answer 4

COGS/AVG A/P

Question 5

days of payables outstanding

Answer 5

End. A/P / COGS/365 “avg cogs per day”

Question 6

quick ratio

Answer 6

cash & cash equivalents + short-term marketable securities + receivables (net) OR CA - inv. - prepaids / C/L

Question 7

Inv. turnover

Answer 7

cogs/avg Inv.

Question 8

cash conversion cycle “net” OC

Answer 8

days in Inv. + days sales in A/R - days of payables outstanding
(# days to sell + # days to collect - # days to repay)

Question 9

cash conversion cycle

Answer 9

days in Inv. (end. Inv. / (cogs/365))+days sales in A/R ( End. A/R net / net (sales / 365)) - days of A/P outstanding ( End. A/P/ (cogs / 365))

Question 10

cost of credit discount “not taking the discount”

Answer 10

)360 or # days in a year / ( total pay period - dis period) ) * ( dis % / ( 100% - dis% ))

Question 11

the formula of economic order quantity contains (order size)

Answer 11

annual “s”ales(in units), cost per purchase “o”rder, “c”arrying a cost per unit ((consistency ))
= root of ( 2so)/c

Question 12

reorder point

Answer 12

safety stock +(lead time*sales during lead time)

Question 13

supply chain operations references model processes or core activities are

Answer 13

plan, source, make, deliver

Question 14

examples of activities associated with Plan

Answer 14

balance demand and supply
. demand requirements ( sales forecast )
.ability of the suppliers to supply resources
. inventory levels

Question 15

examples of activities associated with sources

Answer 15

procure the resources شراء الموارد

.selecting vendors

Question 16

examples of activities associated with make

Answer 16

raw material into finished goods 
. production process
. manufacturing
. packaging
.testing

Question 17

examples of activities associated with deliver

Answer 17

finished goods into the hands
. managing of orders
.forecasting توقع
.pricing
.transportation
.shipping
.labeling

Question 18

zero balance account banking

Answer 18

accompanied by a master or parent account serves to fund any negative balance and maximize the idle cash

Question 19

lockbox banking

Answer 19

expediting deposites by direct mailing of customers remittances to bank post office box

Question 20

concentrating balance

Answer 20

single bak is designed as a central bank as of controlling receipts

Question 21

compensating balances

Answer 21

minimum balances maintained by a bank within a loan

Question 22

the cost of carrying A/R now is

Answer 22

the % of V.cost of the projected sales times the %RRR ( cost of the capital)during the collection period / # days in a year

Question 23

PEG ratio

Answer 23

(current price of share / earning per share for last year) / ( projected growth rate * 100)

Question 24

economic return in any investment or expected return on this investment

Answer 24

(“growth” change in price + dividend income) / beg. price

Question 25

price of equity( dividend growth model)

Answer 25

current price subscript 0 = dividend subscript 1 ( div subscript0*( 1+g)^y) / (R-G)

Question 26

valuing equity with P/E ratio

Answer 26

P0 = (p0/et)*E1

Question 27

valuating equity with the PEG

Answer 27

``` P0 = PEG * Et * (G*100) "Et= E0*(1+g)" ```

Question 28

zero growth - preferred stock

Answer 28

P = Div / R discount rate

Question 29

valuing debt instruments ( whats their price ) | for example bonds that mature in 3 years

Answer 29

sum of pvcfs = coupon rate multiplied by the face or par value / ( 1 + R " market interest rate " ) ^1 + coupon rate multiplied by the face or par value / ( 1 + R " market interest rate " ) ^ 2 + ( par or face value + coupon rate multiplied by the face or par value) / ( 1 + R " market interest rate " ) ^

Question 30

profitability index formula

Answer 30

present value of net future cash inflows / present value of net initial investment or if the investment is not m all made at the time of the initial investment we change the denominator with the present value of future cash outflows

Question 31

economic value added concept formula is

Answer 31

after tax net income - minimum required returns

Question 32

payback period formula is

Answer 32

initial investment for the project / net annual cash inflow

Question 33

return on investment formula is

Answer 33

net profit * asset turnover

Question 34

annual operating cash flow

Answer 34

pre-tax cash inflow * ( 1- tax rate) + dep * (tax rate)

Question 35

initial cash outflow might include

Answer 35

new asset purchase price + associated costs with acquiring the asset + required increase in working capital

Question 36

if the discount ( hurdle) rate is greater than IRR internal rate of return " return on investment "

Answer 36

the NPV will be Negative hurdle rate = IRR when NPV = 0 hurdle rate > IRR when -NPV < 0 hurdle rate < IRR when +NPV > 0

Question 37

rule about present value factor affecting the internal rate of return

Answer 37

present value factor = investment / cash flows any increase in present value factor will decrease the IRR. any increase in the initial investment or decrease in the cash flows will lead to increase in the present value factor which will affect the IRR to decrease

Question 38

total book value of the equity equals

Answer 38

net assets out of liabilities of the company

Question 39

market capitalization equals

Answer 39

(current) market share price * # shares outstanding

Question 40

value of equity using sector Price/Earning ratio

Answer 40

N.I * P/E multiple ratio

Question 41

value of equity using DDM equals

Answer 41

(current dividend *(1+g)) / ( cost of equity using CAPM - growth rate) cost of equity using CAPM = risk-free rate + ( beta*market risk premium )

Question 42

market value of bond equals

Answer 42

par value * current market value per bond / 1000

Question 43

cost of retained earnings equals

Answer 43

D1 or ((D0 * (1+g) ) / P0( +g

Question 44

cost of preferred stock equals

Answer 44

preferred div / market value of preferred stock | " preferred div = preferred stock rate * pare value "

Question 45

after tax cost of debt equals

Answer 45

pre-tax cost of debt * (1-tax rate )

Question 46

total market value of common stock

Answer 46

of common shares * market price

Question 47

total market value of preferred stock

Answer 47

of preferred stock * preferred market price per share

Question 48

total market value of bonds

Answer 48

par value * ( current market value per bond / 1000

Question 49

weighted Avg cost of capital includes

Answer 49

( cost of R/E * weight of R/E or common stock ) + cost of P/S * weight of P/S) + ( post-t cost of bonds * weight of bonds )

Question 50

quick ratio equals

Answer 50

(cash & cash equivalent + A/R + N/R) / current L

Question 51

total debt ratio equals

Answer 51

total L / total A

Question 52

times interest earned equals

Answer 52

IBET/ int exp or earning before int & tax / int exp

Question 53

return on equity equals

Answer 53

N/I / Avg total equity " ( equity y0 + equity y1) / 2"

Question 54

operating cash flow ratio equals

Answer 54

cash flow from operations / ending current liability

Question 55

profit margin

Answer 55

N/I / net sales

Question 56

change in finance cost

Answer 56

old finance cost - new finance cost " first we find the new level of Receivables = sales * Rec collection period # days to collect / # days in a year usually 365 then finance cost charged by the factor = new level of Rec * % charge by the factor on cash

Question 57

operating leverage equals

Answer 57

fixed cost / variable cost

Question 58

require rate of return adjustments

Answer 58

do not include credit risk adjustment