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Question 223  CFFA, interest tax shield

Which one of the following will increase the Cash Flow From Assets in this year for a tax-paying firm, all else remaining constant?



Question 341  Multiples valuation, PE ratio

Estimate Microsoft's (MSFT) share price using a price earnings (PE) multiples approach with the following assumptions and figures only:

  • Apple, Google and Microsoft are comparable companies,
  • Apple's (AAPL) share price is $526.24 and historical EPS is $40.32.
  • Google's (GOOG) share price is $1,215.65 and historical EPS is $36.23.
  • Micrsoft's (MSFT) historical earnings per share (EPS) is $2.71.

Source: Google Finance 28 Feb 2014.



Question 387  real option, option

One of the reasons why firms may not begin projects with relatively small positive net present values (NPV's) is because they wish to maximise the value of their:



Question 436  option, no explanation

Will the price of an out-of-the-money put option on equity or if the standard deviation of returns (risk) of the underlying shares becomes higher?


Question 559  variance, standard deviation, covariance, correlation

Which of the following statements about standard statistical mathematics notation is NOT correct?



Question 696  utility, risk aversion, utility function

Mr Blue, Miss Red and Mrs Green are people with different utility functions. Which of the statements about the 3 utility functions is NOT correct?

Utility curves



Question 837  option, put call parity

Being long a call and short a put which have the same exercise prices and underlying stock is equivalent to being:



Question 851  labour force, no explanation

Below is a table showing some figures about the Australian labour force.

Australian Labour Force and Employment Data
April 2017 Seasonally Adjusted figures
Employed persons ('000) 12 061.9
Unemployed persons ('000) 751.4
Unemployment rate (%) 5.9
Participation rate (%) 64.8
 

 

Source: ABS 6202.0 Labour Force, Australia, Apr 2017

What do you estimate is the size of working age population in thousands (‘000)?



Question 855  cash cycle, accounting ratio

The below diagram shows a firm’s cash cycle.

Diagram

Which of the following statements about companies’ cash cycle is NOT correct?



Question 895  comparative advantage in trade, production possibilities curve

Adam and Bella are the only people on a remote island.

Luckily there are Coconut and Date palm trees on the island that grow delicious fruit. The problem is that harvesting the fruit takes a lot of work.

Adam can pick 7 coconuts per hour, 6 dates per hour or any linear combination of coconuts and dates. For example, he could pick 3.5 coconuts and 3 dates per hour.

Bella can pick 3 coconuts per hour, 5 dates per hour or any linear combination. For example, she could pick 1.5 coconuts and 2.5 dates per hour.

This information is summarised in the table and graph:

Harvest Rates Per Hour
  Coconuts Dates
Adam 7 6
Bella 3 5
 

 

Which of the following statements is NOT correct?