Which of the following cannot be engaged in managing the business?
Which of the following cannot be engaged in managing the business?
a limited partner
a general partner
a sole proprietor
none of these
Question 2One reason for the existence of agency problems between managers and share holders is that:
managers know how to manage the firm better than shareholders.
there is a separation of ownership and control of the firm.
shareholders have unreasonable expectations about managerial performance.
none of these.
Question 3On June 23, 20X8, Mikhal Cosmetics sold $250,000 worth of its products to Rynex Corporation. The goods were shipped to Rynex on July 2. The payment from Rynex was received on September 20. Under the “cash basis of accounting” revenue should be recorded on:
June 23, 20X8.
July 2, 20X8.
September 20, 20X8.
none of the above
Question 4During the last year, Sigma Co had Net Income of $158, paid $16 in dividends, and sold new stock for $37. Beginning equity for the year was $660. Ending equity was
Question 5The following items are components of a traditional balance sheet. How much are the total assets of the firm?
Plant and equipment
$41,500
Common stock
15,000
Cash
6,100
Inventory
22,600
Bad debt reserve
6,000
Additional paid-in capital
6,000
Accumulated depreciation
25,000
Accounts receivable
22,000
Question 6Book value is the value of a company according to its balance sheet. Market value is the value of the company in the eyes of the stock market.
True
False
Question 7When evaluating a Statement of Cash Flows, which of the following would be considered an example(s) of cash flow from financing activities?
Depreciation
Capital Expenditure
Repayment of Bank Loan
All of the Above
Question 8When reviewing a Balance Sheet, which of the following items would you expect to find under Assets?
A. Cash
B. Accounts Payable
C. Inventory
A & B
A & C
Question 9Cameron Balance Sheet
Accounts Payable and Accruals
31
Accounts Receivable
63
Accumulated Depreciation
(175)
Cash
34
Common Stock
120
Fixed Assets (gross)
390
Inventory
135
Long-Term Debt
200
Retained Earnings
65
What is Cameron Inc.’s Net Working Capital?
Question 10A firm’s current ratio is 1.5, and its quick ratio is 1.0. If its current liabilities are $10,900, what are its inventories?
Question 11Iris Income Statement
Cost of Goods Sold
300
Depreciation Expense
35
Interest Expense
20
Operating Expense (excluding depreciation)
115
Sales
770
What was Iris Inc.’s earnings before interest andtaxes (EBIT)?
Question 12Iris Balance Sheet
Accounts Payable and Accruals
65
Accounts Receivable
53
Accumulated Depreciation
(175)
Cash
35
Common Stock
120
Fixed Assets (gross)
390
Inventory
133
Long-Term Debt
200
Retained Earnings
65
What is Iris Inc.’s Total Assets?
Question 13If firm A has a higher debt-to-equity ratio than firm B, then
firm A has a lower equity multiplier than firm B.
firm B has higher financial leverage than firm A.
firm B has a lower equity multiplier than firm A.
none of the above
Question 14 Flying Tigers, Inc., has net sales of $744,000 and accounts receivables of $156,000. What is the firm’s accounts receivables turnover? (Give your answer up to two decimal places)
Question 15Reagan Corp. has reported a net income of $832,100 for the year. The company’s share price is $13.95, and the company has 305,850 shares outstanding. Compute the firm’s price-earnings ratio up to two decimal places.
Question 16You purchased a piece of property for $30,000 nine years ago and sold it today for $83,190. What was the annual rate of return on your investment?
9%
10%
11%
12%
Question 17The First National Bank has agreed to lend you $30,000 today, but you must repay $42,135 in 3 years. What rate is the bank is charging you?
13%
12%
11%
10%
Question 18The Florida lottery agrees to pay the winner $276,000 at the end of each year for the next 20 years. What is the future value of this prize if each payment is put in an account earning 0.09?
Question 19Which of the following is not a “Fundamental Decision of Financial Management”?
The capital budgeting decision
The macroeconomic management decision
The financing decision
Working capital management decision
Question 20Which of the following is least likely to be part of an Annual Report?
financial tables
discussions of the firm’s product lines, its services to its customers, and its contributions to the communities in which it operates
audited financial statements
ratio analysis of other firms in the same industry
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