[
    {
        "id": "validation_Finance_1",
        "question_type": "multiple-choice",
        "answer": "B",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "$152.5",
            "B": "$162.5",
            "C": "$172.5",
            "D": "$182.5"
        },
        "response": "We refer to Wikipedia articles on accounting for help. The required external funds is the difference between the net income and the dividends. Net income is the income statement minus the changes in assets and liabilities. Assets are $3000, liabilities are $2700, so the required external funds is $3000 - $2700 = $300.\n\nTherefore, the answer is (D)."
    },
    {
        "id": "validation_Finance_2",
        "question_type": "multiple-choice",
        "answer": "B",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "5%",
            "B": "7%",
            "C": "13%",
            "D": "15.5%"
        },
        "response": "We are given that the risk premium on the change in gross national product (GNP) is +5%, on change in energy prices is -1%, and on change in long-term interest rates is +2%. We are asked to calculate the expected rate of return on a stock that is uncorrelated with all three factors.\nWe can use the information in the table to calculate the expected rate of return on the stock. Let's assume that the risk premium on the uncorrelated factor is x%. Then, the expected rate of return on the stock can be calculated as follows:\nExpected rate of return = Risk premium on uncorrelated factor + Risk-free interest rate\nExpected rate of return = x% + 7%\nExpected rate of return = x + 7\nWe can plug in the given values to solve for x:\nx = Expected rate of return - Risk-free interest rate\nx = (x + 7) - 7\nx = x + 1\nTherefore, the expected rate of return on the stock is x + 1%. Since we are given that the risk premium on the change in GNP is +5%, the expected rate of return on the stock is 5% + 1% = 6%. Since the risk premium on the change in energy prices is -1%, the expected rate of return on the stock is 6% - 1% = 5%. Since the risk premium on the change in long-term interest rates is +2%, the expected rate of return on the stock is 5% + 2% = 7%. Therefore, the expected rate of return on the stock is 7%, which is the same as the answer given in the options."
    },
    {
        "id": "validation_Finance_3",
        "question_type": "multiple-choice",
        "answer": "C",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "$126,827",
            "B": "$223,248",
            "C": "$36,216",
            "D": "$4,058"
        },
        "response": "The future value of the annuity can be calculated using the following formula:\nFuture value of annuity = (A x I x P) / (I x P + (A x P))\nwhere A is the amount of the annuity, I is the interest rate, and P is the number of years.\nPlugging in the values from the table, we get:\nFuture value of annuity = (2,500 x 8% x 10) / (8% x 10 + (2,500 x 10)) = $126,827\nTherefore, the future value of the annuity in case A is $126,827."
    },
    {
        "id": "validation_Finance_4",
        "question_type": "multiple-choice",
        "answer": "A",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "$14,000,000",
            "B": "$8,000,000",
            "C": "$32,000,000",
            "D": "$18,000,000"
        },
        "response": "We refer to Wikipedia articles on accounting for help. Operating profit is the profit generated by a company's core business operations, after deducting all expenses associated with producing and delivering its goods or services. It is calculated as follows: Operating profit = Gross profit - Operating expenses. Therefore, the answer is (B)."
    },
    {
        "id": "validation_Finance_5",
        "question_type": "multiple-choice",
        "answer": "D",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "the cost of merger through stocks offer is $3,000,000",
            "B": "the cost of merger through stocks offer is $4,000,000",
            "C": "the cost of merger through stocks offer is $4,500,000",
            "D": "the cost of merger through stocks offer is $5,000,000"
        },
        "response": "If the expected growth rate was not changed by the merger, the cost of the share offer would not change. Therefore, the correct answer is (D) the cost of merger through stocks offer is $5,000,000."
    },
    {
        "id": "validation_Finance_6",
        "question_type": "multiple-choice",
        "answer": "B",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "11%",
            "B": "8%",
            "C": "10%",
            "D": "9%"
        },
        "response": "We refer to Wikipedia articles on accounting for help. The rate of return on investment B is 15%, which is 15/6= 2.5 times that on investment A. So the answer is (B)."
    },
    {
        "id": "validation_Finance_7",
        "question_type": "multiple-choice",
        "answer": "D",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "Month 3: $31,000; Month 4: $30,000",
            "B": "Month 3: $81,000; Month 4: $96,000",
            "C": "Month 3: $91,000; Month 4: $86,000",
            "D": "Month 3: $119,000; Month 4: $100,000"
        },
        "response": "We refer to Wikipedia articles on accounting for help. The expected cash inflow from operations in months 3 and 4 is the difference between the total sales and the sales on credit. The sales on credit are paid for in the following months, so the expected cash inflow from operations in months 3 and 4 is $30,000 + $96,000 = $126,000.\n\nTherefore, the answer is (B)."
    },
    {
        "id": "validation_Finance_8",
        "question_type": "short-answer",
        "answer": "360",
        "response": "To calculate Booth's additional funds needed (AFN) for the coming year, we need to determine the amount of cash that the company will need to generate in order to fund its operations and growth. We can do this by adding up the projected increases in each of the company's assets and subtracting any projected decreases in liabilities.\nFirst, let's calculate the projected increases in each asset category:\n\n  * Accounts receivable: $200\n  * Inventories: $200\n  * Net fixed assets: $500 (since fixed assets were used to only 50% of capacity during 2010, we need to increase them by 50% to account for the excess capacity)\n  * Accounts payable: $150\n  * Notes payable: $50\n  * Accruals: $0 (since we are not projecting any changes in accruals)\n  * Common stock: $0 (since we are not projecting any changes in common stock)\n  * Retained earnings: $0 (since we are not projecting any changes in retained earnings)\n\nNext, let's subtract any projected decreases in liabilities:\n\n  * Accounts payable: $150\n  * Notes payable: $50\n  * Accruals: $0\n  * Common stock: $0\n  * Retained earnings: $0\n\nTherefore, Booth's AFN for the coming year is:\n$200 + $200 + $500 + $150 + $50 + $0 + $0 + $0 + $0 = $1,000\nSo, Booth's AFN for the coming year is $1,000."
    },
    {
        "id": "validation_Finance_9",
        "question_type": "multiple-choice",
        "answer": "D",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "$4 million",
            "B": "$5 million",
            "C": "$6 million",
            "D": "$7 million"
        },
        "response": "We refer to Wikipedia articles on accounting for help. The income available to common shareholders is the sum of net income and dividends paid to common shareholders. Net income is $336 million minus $20 million for taxes, or $316 million. The proposed recapitalization will result in the retirement of the $10.50 preferred issue with cash, so the dividends paid to common shareholders will be $10.5 million. Therefore, the income available to common shareholders is $316 million minus $10.5 million, or $205.5 million.\n\nTherefore, the answer is (D)."
    },
    {
        "id": "validation_Finance_10",
        "question_type": "short-answer",
        "answer": "2000000",
        "response": "To calculate the cost of the watches in dollars, we need to first convert the price of the watches from francs to dollars using the exchange rate. The exchange rate for the Swiss franc is 0.50 to $1 in 90 days, so the cost of the watches in dollars would be:\n\n1 million francs x 0.50 = $500,000\n\nTherefore, Desreumaux will have to pay $500,000 for the watches."
    },
    {
        "id": "validation_Finance_11",
        "question_type": "multiple-choice",
        "answer": "B",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "Expansion A: 20% to 24%; Expansion B: 10% to 30%",
            "B": "Expansion A: 16% to 24%; Expansion B: 10% to 30%",
            "C": "Expansion A: 16% to 24%; Expansion B: 20% to 30%",
            "D": "Expansion A: 20% to 24%; Expansion B: 20% to 30%"
        },
        "response": "The range of the rates of return for each of the two projects is:\n\n- Expansion A: 16% to 24%\n- Expansion B: 10% to 30%\n\nTherefore, the correct answer is (B)."
    },
    {
        "id": "validation_Finance_12",
        "question_type": "multiple-choice",
        "answer": "A",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "0",
            "B": "1.23%",
            "C": "2.38%",
            "D": "3.57%"
        },
        "response": "We refer to Wikipedia articles on finance for help. The rate of return for the second period is the percentage increase of the price from $P_1$ to $P_2$ divided by the price at the beginning of the period $P_1$. Thus the rate of return is \\begin{align*}\n\\frac{P_2 - P_1}{P_1} &= \\frac{100}{50} \\cdot \\frac{P_2}{P_1} \\\\\n&= \\frac{2}{1} \\cdot \\frac{100}{50} \\\\\n&= 2\n\\end{align*} The rate of return is 2 percent.\n\nTherefore, the answer is (B)."
    },
    {
        "id": "validation_Finance_13",
        "question_type": "multiple-choice",
        "answer": "C",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "$7.25",
            "B": "$8.75",
            "C": "$9.75",
            "D": "$10.75"
        },
        "response": "We refer to Wikipedia articles on accounting for help. The stockholders' equity sections of the balance sheets are as follows: Common stock: 2014: $2,370,000 2015: $9,080,000 Authorized: 2014: 5,000,000 2015: 5,500,000 Outstanding: 2014: 1,200,000 2015: 1,200,000 600,000 shares 2014: $1.00 2015: $6.00 600,000 shares Paid-in capital in excess of par: 2014: $250,000 2015: $5,500,000 Retained earnings: 2014: $1,520,000 2015: $2,380,000 Total stockholders' equity: 2014: $2,370,000 2015: $9,080,000 The average price per share of the new stock sold during 2015 cannot be determined from the information given."
    },
    {
        "id": "validation_Finance_14",
        "question_type": "multiple-choice",
        "answer": "D",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "$6,340",
            "B": "$7,340",
            "C": "$8,340",
            "D": "$9,340"
        },
        "response": "We refer to Wikipedia articles on accounting for help. Economic value added is calculated as operating income minus capital employed. Capital employed is calculated as total assets minus current and long-term liabilities. Walmart's balance sheet shows total assets of 2,960 million, current and long-term liabilities of 12,167 million, so capital employed is 2,960 million - 12,167 million = -9,207 million. Walmart's income statement shows operating income of 36,825 million, so economic value added is 36,825 million - 9,207 million = 27,618 million.\n\nTherefore, the answer is (A)."
    },
    {
        "id": "validation_Finance_15",
        "question_type": "multiple-choice",
        "answer": "A",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "Project A: 22%; Project B: 23.37%",
            "B": "Project A: 18%; Project B: 28.69%",
            "C": "Project A: 22%; Project B: 28.69%",
            "D": "Project A: 18%; Project B: 23.37%"
        },
        "response": "We can calculate the internal rates of return for each project using the following steps:\n\n  1. Calculate the present value of each project's cash flows using the discount rate.\n  2. Sort the cash flows in descending order.\n  3. Calculate the internal rate of return for each project by finding the discount rate that makes the present value of the cash flows equal to 1.\n\nFor Project A:\n\n  * Cash flows: $200, $0, $200, $0, $200\n  * Present value: $200, $0, $200, $0, $200\n  * Sorted cash flows: $200, $200, $200, $0, $0\n  * IRR for Project A: 22%\n\nFor Project B:\n\n  * Cash flows: $200, $0, $200, $0, $200\n  * Present value: $200, $0, $200, $0, $200\n  * Sorted cash flows: $200, $200, $200, $0, $0\n  * IRR for Project B: 23.37%\n\nTherefore, the correct answer is (A)."
    },
    {
        "id": "validation_Finance_16",
        "question_type": "multiple-choice",
        "answer": "A",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "7.5%",
            "B": "8.5%",
            "C": "10.5%",
            "D": "11.5%"
        },
        "response": "We refer to Wikipedia articles on macroeconomics for help. The average annual rate of inflation expected over the periods is 5%. The real rate of interest is currently 2.5%, so the nominal rate of interest on the 3-month bill is 5% - 2.5% = 2.5%.\n\nTherefore, the answer is (A)."
    },
    {
        "id": "validation_Finance_17",
        "question_type": "short-answer",
        "answer": "1000",
        "response": "$1000 * 12 / 500 = $24"
    },
    {
        "id": "validation_Finance_18",
        "question_type": "multiple-choice",
        "answer": "C",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "5%",
            "B": "7%",
            "C": "13%",
            "D": "15.5%"
        },
        "response": "We are given that the risk premium for each factor is as follows:\n- Change in gross national product (GNP): +5%\n- Change in energy prices: -1%\n- Change in long-term interest rates: +2%\n\nWe are asked to calculate the expected rate of return on stock A, which has average exposure to each factor (i.e., b = 1 for each factor).\n\nExpected rate of return on stock A = Risk premium on each factor * Exposure to each factor\nExpected rate of return on stock A = (5% + 1% + 2%) * 1\nExpected rate of return on stock A = 8%\nTherefore, the answer is (A) 5%."
    },
    {
        "id": "validation_Finance_19",
        "question_type": "multiple-choice",
        "answer": "C",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "0.9397",
            "B": "0.9492",
            "C": "0.8292",
            "D": "0.8194"
        },
        "response": "We refer to Wikipedia articles on probability for help. The probability distribution is given in the table. We need to find the standard deviation. The standard deviation of a random variable is the square root of the variance, which is the average of the squared differences from the mean. The variance is the average of the squared differences from the mean. Thus, the variance is equal to the average of the differences from the mean squared. The average of the differences from the mean squared is equal to the sum of the differences from the mean squared over all the data, divided by the number of data. There are 3 data, 0, 1, 2. The sum of the differences from the mean squared is equal to 1.5 for each data, 3 for the first data, 1 for the second data, and 2 for the third data. Thus, the variance is equal to 3 + 1 + 2 = 6. The standard deviation is equal to the square root of the variance, which is 1.8417.\n\nTherefore, the answer is (D)."
    },
    {
        "id": "validation_Finance_20",
        "question_type": "short-answer",
        "answer": "7243000",
        "response": "The company's total receipts from the sale of the stock will be $80,000 if the auction is a discriminatory auction."
    },
    {
        "id": "validation_Finance_21",
        "question_type": "multiple-choice",
        "answer": "A",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "$2,100",
            "B": "$3,100",
            "C": "$4,100",
            "D": "$5,100"
        },
        "response": "We refer to Wikipedia articles on accounting for help. The liquid assets are $300 cash, $2,000 checking, $12,000 savings, $1,200 IBM stock, $1,200 auto loan, $100,000 mortgage, $4,200 medical bills payable, $150 utility bills payable, and $150,000 real estate. The current liabilities are $3,000 retirement funds, $1,200 IRA, $14,000 savings, $2,000 money market funds, $3,000 jewelry and artwork, $250 household furnishings, $150 credit card balance, and $3,000 personal loan. Therefore, their NWC is $300 + $2000 + $12000 + $1200 + $100000 + $4200 + $150 + $3000 + $150000 - $3000 - $150000 - $3000 - $150000 - $3000 - $150000 - $3000 - $150000 - $3000 = $10000. So the answer is (A)."
    },
    {
        "id": "validation_Finance_22",
        "question_type": "multiple-choice",
        "answer": "C",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "-14.33%",
            "B": "-23.72%",
            "C": "0.45%",
            "D": "56.52%"
        },
        "response": "We refer to Wikipedia articles on macroeconomics for help. According to the table, the inflation rate in 1932 was -10.3%, and the return on the stock market was -9.9%. Thus the real return on the stock market in 1932 was 56.52% (-10.3% inflation rate + -9.9% stock market return).\n\nTherefore, the answer is (D)."
    },
    {
        "id": "validation_Finance_23",
        "question_type": "short-answer",
        "answer": "527.89",
        "response": "The current value of operations for Dozier can be calculated using the free cash flow to the firm (FCFF) method. FCFF is the cash flow available to a company after all operating, investing, and financing activities have been paid for.\nTo calculate FCFF, we need to subtract capital expenditures (CAPEX) from operating cash flow (OCF). OCF is the cash flow available to a company after all operating activities have been paid for, including cash received from sales and operating assets.\nTheFCFF formula is:\nFCFF = OCF - CAPEX\nUsing the projected FCFs and CAPEX from the given information, we can calculate the FCFF for each year:\nYear 1: FCFF = $30 million - $20 million = $10 million Year 2: FCFF = $30 million - $20 million = $10 million Year 3: FCFF = $30 million - $20 million = $10 million\nAssuming a constant growth rate of 7% after year 3, the FCFF for year 4 would be:\nFCFF = $10 million x (1 + 0.07) = $10.7 million\nTherefore, the FCFF for the next 4 years would be:\nYear 1: $10 million Year 2: $10 million Year 3: $10 million Year 4: $10.7 million\nTo calculate the current value of operations for Dozier, we need to discount the FCFF using the company's cost of capital. The cost of capital is the minimum return that investors require to invest in the company. In this case, the cost of capital is 13%.\nThe current value of operations for Dozier can be calculated using the following formula:\nCurrent value of operations = FCFF / (1 - (1 + r)^-n)\nWhere r is the cost of capital and n is the number of years until the end of the projection period.\nUsing the cost of capital and the FCFF for the next 4 years, we can calculate the current value of operations for Dozier:\nCurrent value of operations = $10.7 million / (1 - (1 + 0.13)^-4) = $25.5 million\nTherefore, the current value of operations for Dozier is $25.5 million."
    },
    {
        "id": "validation_Finance_24",
        "question_type": "short-answer",
        "answer": "30.0",
        "response": "To compute the price-to-earnings (P/E) ratio for the industry, we need to divide the current stock price by the forecast industry earnings retention rate. \n\nP/E ratio = (P0/E1) \n\nwhere P0 is the current stock price and E1 is the forecast industry earnings retention rate. \n\nSubstituting the given values, we get:\n\nP/E ratio = (P0/E1) \n\nP/E ratio = (40% / 25%) \n\nP/E ratio = 1.6 \n\nTherefore, the price-to-earnings (P/E) ratio for the mature manufacturing industry is 1.6."
    },
    {
        "id": "validation_Finance_25",
        "question_type": "short-answer",
        "answer": "0.286",
        "response": "FCFE for 2011 is $0.286 * 489.99 = $134.46. FCFE for 2010 is $0.201 * 489.99 = $98.18. FCFE for 2010 is $0.074 * 489.99 = $36.43. FCFE for 2010 is $0.084 * 489.99 = $39.90. FCFE for 2010 is $0.057 * 489.99 = $28.39. FCFE for 2010 is $0.057 * 489.99 = $28.39. FCFE for 2010 is $0.057 * 489.99 = $28.39. FCFE for 2010 is $0.057 * 489.99 = $28.39. FCFE for 2010 is $0.057 * 489.99 = $28.39. FCFE for 2010 is $0.057 * 489.99 = $28.39. FCFE for 2010 is $0.057 * 489.99 = $28.39. FCFE for 2010 is $0.057 * 489.99 = $28.39. FCFE for 2010 is $0.057 * 489.99 = $28.39. FCFE for 2010 is $0.057 * 489.99 = $28.39. FCFE for 2010 is $0.057 * 489.99 = $28.39. FCFE for 2010 is $0.057 * 489.99 = $28.39"
    },
    {
        "id": "validation_Finance_26",
        "question_type": "multiple-choice",
        "answer": "D",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "interest rate = 5.0%; present value = $1,200,000",
            "B": "interest rate = 10.0%; present value = $1,000,000",
            "C": "interest rate = 8.0%; present value = $250,000",
            "D": "interest rate = 6.0%; present value = $50,000"
        },
        "response": "The correct answer is (C) interest rate = 8.0%; present value = $250,000\n\nWe can use the formula for the present value of a perpetuity to find the answer. The formula is:\n\nPV = (A/P)^T * (1 + r)^T\n\nwhere PV is the present value, A is the annual amount, P is the perpetuity, r is the discount rate, and T is the number of periods.\n\nPlugging in the values from the table, we get:\n\nPV = (A/P)^T * (1 + r)^T\nPV = (20,000/100,000)^6 * (1 + 8%)^6\nPV = 0.025 * 1.08^6\nPV = $250,000\n\nTherefore, the interest rate is 8% and the present value of perpetuity C is $250,000."
    },
    {
        "id": "validation_Finance_27",
        "question_type": "multiple-choice",
        "answer": "C",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "7.5%",
            "B": "8.5%",
            "C": "10.5%",
            "D": "11.5%"
        },
        "response": "We refer to Wikipedia articles on macroeconomics for help. The real rate of interest is the nominal rate of interest minus the expected rate of inflation. Since the expected rate of inflation is 5%, the real rate of interest is 2.5% - 5% = -2.5%. Since the real rate of interest is negative, the nominal rate of interest must be above the expected rate of inflation to make sense. Thus, the correct answer is (A) 7.5%."
    },
    {
        "id": "validation_Finance_28",
        "question_type": "multiple-choice",
        "answer": "A",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "5.58",
            "B": "2.34",
            "C": "15.18",
            "D": "3.85"
        },
        "response": "We refer to Wikipedia articles on macroeconomics for help. The spot exchange rate means the current exchange rate, which is 15 nanos per dollar. The dollar interest rate for 1 year is the annualized rate of the dollar interest rate compounded for one year, which is 4.0% * (1 + 1) = 5.58.\n\nTherefore, the answer is (A)."
    },
    {
        "id": "validation_Finance_29",
        "question_type": "multiple-choice",
        "answer": "C",
        "all_choices": [
            "A",
            "B",
            "C",
            "D"
        ],
        "index2ans": {
            "A": "Project A: 3 years; Project B: 3 years; Project C: does's exist",
            "B": "Project A: 3 years; Project B: does's exist; Project C: 3 years",
            "C": "Project A: does's exist; Project B: 3 years; Project C: 5 years",
            "D": "Project A: does's exist; Project B: does's exist; Project C: does's exist"
        },
        "response": "We refer to Wikipedia articles on accounting for help. The payback period is the number of years it takes for the net present value of all cash inflows to be recovered by the project. For a given set of projects, the payback period is the smallest among all the project's discount periods. Since there is no project C, we cannot calculate its payback period. For projects A and B, their payback periods are 3 years. For project A, the net present value of all cash inflows is $3,000, and for project B, it is $4,000. Therefore, the discounted payback period for project A is 3 years, and for project B, it is also 3 years. Therefore, the answer is (B)."
    },
    {
        "id": "validation_Finance_30",
        "question_type": "short-answer",
        "answer": "1249",
        "response": "$ 1,000 5.00% 14 years $ 1,000 @ 5.00% for 14 years = $ 5,555.56 $ 5,555.56 / 2 = $ 2,777.88 Required return of 8% is greater than the bond's coupon rate of 5.00%, so the present value is less than $ 1,000.00 Bond D is not present valued at $ 1,000.00."
    }
]