STR 581 Week 6 Discussion Questions

Topics: Cash flow, Net present value, Variable cost Pages: 6 (703 words) Published: October 30, 2014
In this file of STR 581 Week 6 Discussion Questions you will find the next information: DQ 1: Provide an example of an industry experiencing a red ocean. In your opinion, how might the industry be converted into a blue ocean? DQ 2: What problems have you faced when creating your implementation plan? DQ 3: Explain what is strategic control and what are the four basic types? Please provide examples to support your response. STR 581 STR581 Week 4 Capstone Final Examination, Part 2

Which of the following financial statements is concerned with the company at a point in time?

income statement

statement of cash flows

retained earnings statement

balance sheet

2

A cost which remains constant per unit at various levels of activity is a:

fixed cost

mixed cost

variable cost

manufacturing cost

3

M&M Proposition 1: Dynamo Corp. produces annual cash flows of $150 and is expected to exist forever. The company is currently financed with 75 percent equity and 25 percent debt. Your analysis tells you that the appropriate discount rates are 10 percent for the cash flows, and 7 percent for the debt. You currently own 10 percent of the stock.

If Dynamo wishes to change its capital structure from 75 percent equity to 60 percent equity and use the debt proceeds to pay a special dividend to shareholders, how much debt should they use?

$600

$375

$225

$321

4

Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)

32%

16%

12%

40%

5

The process of evaluating financial data that change under alternative courses of action is called:

contribution margin analysis

cost-benefit analysis

double en...

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Which of the following financial statements is concerned with the company at a point in time?

income statement

statement of cash flows

retained earnings statement

balance sheet

2

A cost which remains constant per unit at various levels of activity is a:

fixed cost

mixed cost

variable cost

manufacturing cost

3

M&M Proposition 1: Dynamo Corp. produces annual cash flows of $150 and is expected to exist forever. The company is currently financed with 75 percent equity and 25 percent debt. Your analysis tells you that the appropriate discount rates are 10 percent for the cash flows, and 7 percent for the debt. You currently own 10 percent of the stock.

If Dynamo wishes to change its capital structure from 75 percent equity to 60 percent equity and use the debt proceeds to pay a special dividend to shareholders, how much debt should they use?

$600

$375

$225

$321

4

Serox stock was selling for $20 two years ago. The stock sold for $25 one year ago, and it is currently selling for $28. Serox pays a $1.10 dividend per year. What was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.)

32%

16%

12%

40%

5

The process of evaluating financial data that change under alternative courses of action is called:

contribution margin analysis

cost-benefit analysis

double entry analysis

incremental analysis

6

What decision criteria should managers use in selecting projects when there is not enough capital to invest in...
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