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NEW QUESTION: 1

A. Option B
B. Option A
C. Option D
D. Option C
Answer: B

NEW QUESTION: 2
Ivan Johnson is reviewing the investment merits of BioTLab, a fast-growing biotechnology company.
BioTLab has developed several drugs, which arc being licensed to major drug companies. BioTLab also has several drugs in phase III trials (phase III trials are the last testing stage before FDA approval).
Johnson notes that two drugs recently received approval which should provide BioTLab solid revenue growth and generate predictable cash flow well into the future. Based on the potential for the two drugs, BioTLab's estimated annual cash flow growth rate for the next two years is 25%, and long-term growth is expected to be 12%. Because of BioTLab's attractive investment opportunities, the company does not pay a dividend. BioTLab's current weighted average cost of capital is 15% and its stock is currently trading at
$50 per share. Financial information for BioTLab for the most recent 12 months is provided below:
* Net working capita! excluding cash increased from $7,460,000 to $9,985,000;
* Book value increased from $81,250,000 to $101,250,000.
* BioTLab currently has no debt.
* Research facilities and production equipment were purchased for $8,450,000.
* BioTLab held non-operating assets in the amount of $875,000.
* Net income for the 12 months was $20,000,000.
* BioTLab has a marginal tax rate of 40%.
* Noncash charges for depreciation and restructuring for the 12 months were $1,250,000.
BioTLab's management has indicated an interest in establishing a dividend and will fund new drug research by issuing additional debt.
Johnson also reviews a competitor to BioTLab, Groh Group, which has a larger segment operating in a highly cyclical business. The Groh Group has a debt to equity ratio of 1.0 and pays no dividends. In addition, Groh Group plans to issue bonds in the coming year.
Using a two-stage, free cash flow to the firm model, determine which of the following is closest to the value of BioTLab.
A. $419 million.
B. $477 million.
C. $436 million.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Free cash flow to the firm (FCFF) can be calculated in many ways but in this question, you are given enough information to calculate the measure in the following way:
FCFF = net income + non-cash charges + interest (1 - t) - fixed capital investment -working capital investment

If a firm has non-operating assets (e.g., land held for investment) on its balance sheet, the value of these assets must be added to the value of the operating assets (determined using the present value of the FCFFs and terminal value) to find the total firm value.
Total firm value = value of operating assets + value of non-operating assets Total firm value = 476,521,739 + 875,000 = 477,396,739 (Study Session 12. LOS 41.k)

NEW QUESTION: 3
You have just called 911 and have returned with your AED to a victim who did not respond to gentle shake and shout. What should you do next?
A. peel the backing from the adhesive electrode pads carefully
B. place the victim in the recovery position
C. perform 2 finger sweeps
D. Open the airway, check breathing, if not breathing give 2 breaths
Answer: D
Explanation:
This important question asks, once again: "You have a defibrillator in one hand and a victim who needs both CPR and possibly defibrillation. Which do you choose?"
The answer is, "Go back to the ABCs: check airway, check breathing, check pulse; it no pulse, use the AED." This question also makes the point that NO PULSE is the signal to USE THE AED.
The other answers - b, c, and d are legitimate actions, but they are not indicated at this point in the treatment sequence.