Kensley Biscuit Company Ltd. decides to invest £125,000 in new packaging equipment to help it keep up with increased demand. As a result of this investment, the company’s annual profit improves by £11,763. If Kensley’s cost of capital is 8.25% and its corporate tax rate is 42%, what is its residual income (RI) from the investment?
A company which experiences increased business volumes but a minimal increase in profitability MOST LIKELY has:
A-Plus Company has made arrangements for a new insurance broker to provide products to its employees. Historically, A-Plus Company’s employees made insurance payments via payroll deduction, but the new broker will be collecting payments from employees directly. What will the broker MOST LIKELY use to minimize collection float?
Which statement is true about credit unions?
Which of the following is sought from a typical cash management services Request for Proposals (RFP)?
Which of the following is a purpose of the Check 21 Act?
For ABC Company in the last fiscal year, the operating profit was $8,500,000, the tax rate was 33%, the total capital was $75,000,000, and the WACC was 9.7%. What was the EVA for ABC?
The board of directors announces an increase in its dividend from $0.11/share to $0.15/share. Over the next two quarters, management notices that its investor base has shifted to include a large percentage of pension funds and endowment funds. This is the result of:
Money market funds are able to obtain very competitive trading terms because:
Which of the following is generally NOT a benefit of financial risk management?
DGB Inc.’s CEO and founder retired shortly after the company went public two years ago. DGB Inc. has recently struggled, and the founder has agreed to return as an independent director. What violation, if any, has occurred?
Based on the above information,
if the company uses the trade-off theory in considering its WACC, how will it finance its growth?
Which of the following is true of return on investment (ROI)?
When a company announces a significant and unexpected dividend increase, it signals to the market that management expects:
The controller is developing a financial plan that includes an operating budget and a financial budget. Which of the following statements is true?
Company ABC has a concentrated investor base consisting primarily of large institutional shareholders. It would like to increase its number of smaller shareholders using the most cost effective method of raising capital available. What should Company ABC do to accomplish this goal?
When company profits are high, what is the MOST LIKELY way management will prefer to finance growth?
A portfolio manager’s investment policy states that they are not allowed to hold any investments that have extension risk. Which type of investment should the portfolio manager avoid?
An institutional investor has purchased an investment that provides a fixed rate of return with some potential for delays in payments. The return is 70% tax deductible for this particular investor. What type of investment was MOST LIKELY purchased?
After several internal discussions about treasury management systems (TMSes), ABC Company has determined that it has no need for customization but that it does want a backup for high priority capabilities. The company wants to reduce its IT costs and resources but still have IT support with in-depth knowledge of the solutions available. These parameters will MOST LIKELY result in what kind of TMS?
