QUESTION 1 0.5 points Sav Which one of the following statements ...

  1. Home
  2. Homework Library
  3. Business
  4. Finance
  5. QUESTION 1 0.5 points Sav Which one of the following statements ...

QuestionQuestion

Transcribed TextTranscribed Text

QUESTION 1 0.5 points Sav Which one of the following statements is related to capital budgeting? a. A firm should consider various types of loans offered by various lenders before taking out a lo b. A firm should consider the size, risk, and timing of an asset's cash flows before deciding to pu that asset. C. A firm should determine the ideal level of inventory that should be kept on hand. d. A firm should monitor the amount of its current assets as compared to its current liabilities. e. A firm should monitor the ratio of debt to equity financing which it uses. QUESTION 2 0.5 points Sav Working capital management includes which of the following? I. deciding how much long-term debt to assume. II. determining when to pay suppliers. III. controlling the inventory level. IV. controlling the amount of cash that is readily available. a. II and III only b. I and Il only C. II, III, and IV only d.l, II, and IV only e. I and IV only QUESTION 3 0.5 points Sav Under a general partnership, a. limited partners control the daily activities of the firm but face unlimited liability for all of the de partnership. b. each partner's potential loss is limited to his or her investment in the firm but he or she has un over the daily operations of the partnership. C. limited partners enjoy limited liability but lose the ability to be involved in the daily operations ( partnership. d. each partner receives only a proportionate share of the profits but is responsible for 100 perce partnership debts. e. the general partner has unlimited liability and must consult with the limited partners on daily o issues. QUESTION 4 0.5 points Save A Which one of the following statements about a limited partnership is correct? a. A limited partnership is generally expensive to form. b. The income is taxed as if the partnership were a corporation. C. A limited partnership continues if a general partner dies. d. A general partner can easily transfer his or her partnership interest. e. A limited partner can sell his or her interest without the partnership dissolving. QUESTION 5 0.5 points Save A The primary advantages of a limited liability company are the: a. avoidance of any financial loss and the corporate taxation. b. means of taxation and the limits on the liabilities assumed by the owners. C. ease of trading the shares of stock in the firm and the personal taxation of the net profits. d. limited liabilities and the double taxation. e. limited liabilities for the limited partners and the control of management by the general partners. QUESTION 6 0.5 points Save A Which one of the following actions best matches the primary goal of financial management? a. increasing the net working capital while maintaining the same level of sales b. increasing the size of the company by acquiring another firm in a different industry c. decreasing the variable costs while increasing the fixed costs per unit sold d. decreasing the liquidity of the firm while increasing the long-term debt e. increasing the market value of the equity by improving the efficiency of operations QUESTION 7 0.5 points Which one of the following situations is most apt to create an agency problem? a. the company president receives a bonus based on the profits of the firm b. an employee receives a pay raise based on his or her extraordinary contributions to the firm c. a manager receives a bonus because he or she has hired the most new employees in the past ye d. an employee is paid twice the normal wage for working overtime to complete a special project or for a customer e e. a manager is rewarded because the employees in his or her department had no accidents for a y QUESTION 8 0.5 points Save A The Sarbanes-Oxley Act of 2002 is a governmental response to: a. the terrorists attacks on 9/11/2001. b. deregulation of the stock exchanges. c. management greed and abuses. d. a weakening economy. e. decreasing corporate profits. QUESTION 9 0.5 points Save A Which one of the following transactions occurs in the primary market? a. POQ sells new shares of POQ to Frederico. b. Martha sells shares of KLM to her son. c. Jane sells shares of GHI to Robert. d. QRS buys back shares of QRS from Alicia. e. ABC Co. sells XYS stock on the NYSE. QUESTION 10 0.5 points Save A Which one of the following statements is generally correct? a. Dealer markets have a physical trading floor. b. All secondary markets are auction markets. c. Auction markets match buy and sell orders. d. Dealers arrange trades but never own the securities traded. e. Private placements must be registered with the SEC. QUESTION 11 0.5 points Save A Which one of the following will increase the net working capital of a firm? a. paying a payment to the bank on a ten-year mortgage b. collecting a payment from a customer, which pays off his or her account receivable C. taking out a 10-year mortgage to purchase some new property d. paying a supplier for inventory purchased 30 days ago e. selling shares in the company and using the funds to increase the inventory level QUESTION 12 0.5 points Save A Holding highly liquid assets a. tends to increase the fixed assets and decrease the current assets. b. increases the potential returns to the stockholders. C. increases the probability that a firm will be financially distressed. d. tends to reduce the potential profits as compared to holding less liquid assets. e. tends to lower the net working capital as compared to holding less liquid assets. QUESTION 13 0.5 points Save A Financial leverage a. reduces the odds that a firm will encounter financial distress. b. allows a firm to greatly increase its assets without increasing its debt. C. refers to the issuance of company stock to finance a new business venture. d. when used in moderation tends to lower the potential rewards to stockholders. e. when overextended greatly magnifies the possibility that a firm will become bankrupt. QUESTION 14 0.5 points Save A Which one of the following is a noncash item? a. the purchase of a fixed asset b. annual depreciation on a fixed asset C. inventory which was purchased on credit d. the cost of inventory sold on credit e. wages earned by an employee QUESTION 15 0.5 points Save A Which one of the following best exemplifies the concept of a marginal tax rate? a. As the result of opening a new store, the Jones Co. had to pay an additional $1.2 million in taxes. b. Lewis closed his company and as a result received a tax refund based on his tax losses. C. Stonewall, Inc. paid $6.2 million in taxes last year. d. Ester, Inc., pays an average of $.20 in tax on every $1 they earn. e. Alpha Industries pays $2 million more in taxes than their sister company. QUESTION 15 0.5 points Save A Which one of the following best exemplifies the concept of a marginal tax rate? a. As the result of opening a new store, the Jones Co. had to pay an additional $1.2 million in taxes. b. Lewis closed his company and as a result received a tax refund based on his tax losses. c. Stonewall, Inc. paid $6.2 million in taxes last year. d. Ester, Inc., pays an average of $.20 in tax on every $1 they earn. e. Alpha Industries pays $2 million more in taxes than their sister company. QUESTION 16 0.5 points V A negative cash flow from assets . a. guarantees that a firm raised additional equity during the stated period. b. means the operating cash flow for the period had to be negative. c. signals that a firm is relying on external financing for its operations. d. results from an increase in the profitability of the firm. e. indicates that a firm is financially sound. QUESTION 17 0.5 points Save A All else constant, net working capital decreases when a. cash increases more than inventory decreases. b. accounts receivable increases more than accounts payable increases. c. accounts payable increases more than inventory increases. d. cash and inventory both increase. e. accounts receivable and accounts payable change by the same amount. QUESTION 18 0.5 points Save A Marty Town Company paid $800 in interest last year. During the past year, the company paid $500 on its and borrowed an additional $2,000. Which one of the following best describes this situation? a. The cash flow to creditors is negative. b. The cash flow from assets has to be positive. c. The cash flow to stockholders is negative. d. The cash flow from operations is negative. e. The net cash flow to creditors can not be determined. QUESTION 18 0.5 points Save A Marty Town Company paid $800 in interest last year. During the past year, the company paid $500 on its and borrowed an additional $2,000. Which one of the following best describes this situation? a. The cash flow to creditors is negative. b. The cash flow from assets has to be positive. c. The cash flow to stockholders is negative. d. The cash flow from operations is negative. e. The net cash flow to creditors can not be determined. QUESTION 19 0.5 points Save A A negative cash flow to stockholders indicates that a firm has: a. borrowed additional funds equal to the shortfall in the cash flow from assets. b. issued dividends while maintaining a constant number of outstanding shares of stock. c. reduced the amount of long-term debt outstanding. d. incurred net losses and is facing financial distress. e. sold additional shares of stock. QUESTION 20 0.5 points Save A CSX Enterprises has total assets of $11,700, net working capital of $1,600, owners' equity of $5,000 an term debt of $3,500. What is the value of the current assets? a. $7,200 b. $2,100 c. $4,600 d. $1,800 e. $4,800 QUESTION 21 0.5 points Save A Vandelay Industries has net working capital of $2,400, long-term debt of $8,200, total debt of $10,100, a owners' equity of $12,000. What is the value of Vandelay's net fixed assets? a. $17,800 b. $22,100 C. $15,900 d. $7,700 e. $11,500 QUESTION 22 0.5 points Save Ans ABC Inc. had beginning retained earnings of $64,080. During the year, the company reported sales of $127,800, costs of $89,900, depreciation of $11,200, dividends of $2,800, and interest paid of $3,400. The rate is 35%. What is the retained earnings balance at the end of the year? a. $75,445 b. $78,245 c. $76,425 d. $83,600 e. $68,455 QUESTION 23 0.5 points Save Ans Kramerica Enterprises has net working capital of $2,100, net fixed assets of $23,600, current liabilities of $1,800, and long-term debt of $14,700. What is the value of the shareholders' equity? a. $12,800 b. $11,000 c. $16,400 d.$9,200 e. $6,800 QUESTION 24 0.5 points Save Ans XYZ Co., has cash of $900 and accounts receivable of $1,300. The inventory cost $4,200 and can be solo today for $6,100. The fixed assets were purchased at a cost of $42,800 of which $18,300 has been depreciated. The fixed assets can be sold today for $19,500. What is the total book value of the assets of company? a. $32,800 b. $27,800 c. $49,200 d. $30,900 e. $37,600 QUESTION 25 0.5 points Save Ans The financial statements of Hullur's Antiques reflects cash of $21,300, collectible accounts receivable of $37,700, accounts payable of $45,900, inventory of $63,300, long-term debt of $80,000, and net fixed ass of $123,400. The firm estimates that if they wanted to cease operations today that they could sell the inve for $48,000 and the fixed assets for $99,000. What is the market value of the assets? a. $80,100 b. $245,700 c. $236,700 d. $206,000 e. $119,800 QUESTION 26 0.5 points Save Ans Stentson Co., owes $36,485 in tax on a taxable income of $136,500. The company has determined that th will owe $38,435 in tax if their taxable income rises to $141,500. What is the marginal tax rate at this level income? a. 38% b. 34% c. 25% d. 15% e. 39% QUESTION 27 0.5 points Save Ans Kirk Enterprises has net sales of $982,500 and costs of $789,100. The depreciation expense is $124,700 : the interest paid is $23,100. What is the amount of the firm's operating cash flow if the tax rate is 34%? a. $30,096 b.$53,196 C. $177,896 d. $154,796 e. $200,996 ©2008-2021 24houranswe VESTION 28 0.5 points Save Ansv The Alfredo Brothers paid $123,600 in interest over the year, along with $88,000 in dividends. The compan issued $130,000 of stock and $50,000 of new debt. During the year, the company reduced the balance due the old debt by $435,000. What is the amount of the cash flow to creditors for the year? a. $508,600 b. $261,400 c. $361,400 d. $385,000 e. $608,600 VESTION 29 0.5 points Save Ansv WMT Inc., repurchased $125,000 of its common stock seven months ago. The company pays regular dividends totaling $24,000 per quarter. What is the amount of the cash flow to stockholders for the past ye a. $221,000 b. $101,000 c. $29,000 d. $25,000 e. $149,000 UESTION 30 0.5 points Save Ansv Which one of the following statements is correct concerning the percentages found on a common-size inc statement? a. Over time, the interest paid percentage should remain constant if the firm maintains the same amour debt and the sales increase. b. An increase in the cost of goods sold percentage over time is considered healthy for a firm. C. All accounts are expressed as a percentage of net income. d. A decrease in the percentage of the earnings before interest and taxes over time demonstrates that firm is improving its operating efficiency. e. The cost of goods sold percentage should remain relatively constant over time unless the wholesale retail price of a firm S inventory changes. VESTION 31 0.5 points Save Ansv Which one of the following transactions will increase the liquidity of a firm? a. increasing short-term debt while decreasing long-term debt by an equivalent amount b. using cash to purchase new equipment C. increasing the sales on credit while reducing cash sales by the same amount d. issuing long-term debt to repurchase shares of outstanding stock e. selling inventory on credit UESTION 32 0.5 points Save Ansv A current ratio less than 1.0 means that a firm presently has: a. sufficient short-term assets to meet its short-term obligations provided that all assets sell at their sta book value. b. a positive net working capital and a quick ratio which is also less than 1.0. C. more debts due within the next year than assets that should convert to cash within that same time period. d. less total assets than it does debts payable within the upcoming twelve months. e. enough assets that will convert to cash in time to pay all of the debts payable within the next twelve months. UESTION 33 0.5 points Save Ansv When a firm increases its inventory turnover rate, it has to be: a. selling its inventory in less days, regardless of the level of total sales for the year. b. buying inventory more frequently, while increasing its total sales significantly. c. lowering its total sales for the year, while maintaining the same level of inventory. d. buying inventory less frequently, while maintaining the same level of sales. e. increasing its total sales for the year. UESTION 34 0.5 points Save Ansv If a manager notices that the firm S receivables turnover rate is declining, he or she should assume that: a. the days sales in receivables is also declining. b. the current ratio of the firm is also declining. C. the average amount of merchandise each customer is buying is declining. d. the firm is making less profit on each item sold. e. on average, it is taking each customer longer to pay for their purchases. UESTION 35 0.5 points Save Ansv Which one of the following will increase the profit margin of a firm? a. increasing the fixed costs b. increasing the interest paid C. increasing the cost of goods sold d. increasing the depreciation expense e. decreasing the tax rate UESTION 36 0.5 points Save Ansv If the total assets of a firm increase while all the other components of ROE remain unchanged, you would expect the firm S: a. return on equity to increase. b. profit margin to decrease. C. total asset turnover to decrease. d. equity multiplier to decrease. e. return on assets to increase. UESTION 37 0.5 points Save Ansv Which one of the following statements is true concerning the price-earnings ratio? a. Price-earnings ratios are sensitive to the accounting methods employed by the firm. b. A price-earnings ratio of 12 means that investors are willing to pay $1 for every $12 of current earnin C. A firm with low current earnings will also have a low price-earnings ratio. d. A firm with high earnings per share will also have a very high price-earnings ratio. e. A high price-earnings ratio is often taken to mean that a firm has poor prospects for future growth. UESTION 38 0.5 points Save Ansv The Du Pont identity helps financial managers determine: I. the reasons why a firm's return on equity is unsatisfactory II. the operating efficiency of a firm III. the asset use efficiency of a firm IV. the rate of return on a firm S assets a. II and III only b.l, II, and III only c. I, II, III, and IV d. II, III, and IV only e. I and III only VESTION 39 0.5 points Save Ansy The sustainable rate of growth exceeds the internal rate of growth because the a. internal rate is computed using the retention ratio while the sustainable rate is computed using the dividend payout ratio. b. sustainable rate increases debt as the firm increases its retained earnings, while the internal rate doe not. C. internal rate is computed using return on equity and the sustainable rate is based on return on asset d. internal rate assumes that the debt-equity ratio is constant. e. sustainable rate assumes that all income is reinvested in the firm, while the internal rate assumes so income is distributed in the form of dividends. UESTION 40 0.5 points Save Ansy Which one of the following statements concerning financial statement analysis is correct? a. The purchase of inventory using short-term credit will decrease the current ratio. b. The firm with the highest price-earnings ratio will produce the highest earnings per share for the following year. C. The company within a particular industry that has the lowest debt-equity ratio is the most profitable. d. A decrease in the accounts receivable turnover rate is an indication that a firm is collecting its receivables faster. e. The Du Pont identity provides a measure of a firm S operating efficiency, asset use efficiency, and ca flow efficiency.

Solution PreviewSolution Preview

These solutions may offer step-by-step problem-solving explanations or good writing examples that include modern styles of formatting and construction of bibliographies out of text citations and references. Students may use these solutions for personal skill-building and practice. Unethical use is strictly forbidden.

1 B. size risk and timing
2 c. II III and IV only
3 D. receives only proportionate share of profits
4 E. can sell without dissolvin
5 B means of taxation
6 E. market value increase...

By purchasing this solution you'll be able to access the following files:
Solution.xlsx.

$30.00
for this solution

PayPal, G Pay, ApplePay, Amazon Pay, and all major credit cards accepted.

Find A Tutor

View available Finance Tutors

Get College Homework Help.

Are you sure you don't want to upload any files?

Fast tutor response requires as much info as possible.

Decision:
Upload a file
Continue without uploading

SUBMIT YOUR HOMEWORK
We couldn't find that subject.
Please select the best match from the list below.

We'll send you an email right away. If it's not in your inbox, check your spam folder.

  • 1
  • 2
  • 3
Live Chats