Your new firm is operating in an all-cash environment without taxes. You sold $1,000 of inventory for three times the amount you paid for it. If this was the only transaction, which of the following would most closely match the entries on your income statement? A) Revenues = $1,000, expenses = $1,000, profit = $0 […]
Date: September 19th, 2020
The MIRR method requires the specification of two interest rates, the hurdle rate and the reinvestment rate. These rates may or may not be identical. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Tangshan Mining has 100,000 shares outstanding and just declared a 2-for-1 stock split. Before the announcement, the firm’s shares were trading at $50.00 per share. After the stock split, the firm’s shares should trade at ________ per share. A) $100.00 B) $25.00 C) $50.00 D) $75.00 ANSWER B
Date: September 19th, 2020
A comprehensive nonfinancial size-up should be done: A) monthly. B) quarterly. C) annually. D) as needed. E) All of the above. ANSWER C
Date: September 19th, 2020
Many firms in a particular industry strive to have very similar capital structures. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
When a firm stretches accounts payable without hurting its credit rating, the cost of giving up a cash discount is ________. A) reduced B) increased C) unaffected D) increased or decreased depending on the opening accounts payable balance ANSWER A
Date: September 19th, 2020
Management statements is a third technique identified by the author as a method of determining the appropriate weights for WACC calculations. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A comprehensive nonfinancial size-up is a useful tool for: A) financial managers. B) lenders. C) investors. D) All of the above. ANSWER D
Date: September 19th, 2020
The profitability index is the right but not the obligation to make a business decision. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Your firm has a beginning balance of $8,000 cash, $2,000 inventory, and $10,000 initial equity. Your firm is operating in an all-cash environment without taxes. You sold $1,000 of inventory for three times the amount you paid for it. If this is your only transaction, your resulting balance sheet should most closely resemble which of […]
Date: September 19th, 2020
