Accounts payable are spontaneous secured sources of short-term financing that arise from the normal operations of a firm. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Ajax enterprises, Inc has the following income statement items: sales of $48,250,000; operating expenses of $10,225,000; cost of goods sold of $32,025,000; and interest expense of $650,000. If the firm’s income tax rate is 34%, what is the amount of the firm’s income tax liability? A) $1,665,000 B) $2,040,000 C) $1,819,000 D) $1,385,000 […]
Date: September 19th, 2020
A constant-payout-ratio dividend policy is based on the payment of a certain percentage of earnings to owners in each dividend period. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Two firms, Sunny Inc, and Rainy Inc, are alike in every way. They sell the same products in the same markets for the same price and have equally good reputations. In fact, they even have identical ROEs. If Rainy Inc however, has a higher leverage ratio, then we can conclude that: A) Rainy Inc. shareholders […]
Date: September 19th, 2020
A firm that has a large percentage of ________ investors may pay out a lower percentage of its earnings as dividends. A) wealthy B) domestic C) middle-income D) international ANSWER A
Date: September 19th, 2020
Based on the selected financial information for Coffeeberry Coffeehouse, calculate net income for 2012. A) $100 B) $900 C) $500 D) $300 ANSWER B Explanation: B) NI = Div + Addition to R/E = $700 + ($6,350 – $6,150 ) = $900.
Date: September 19th, 2020
The ________ is cited by the author as a reason for using just one rate, a long-term yield, as the average cost of debt financing for a firm that has multiple issues of debt with varying maturities. A) efficient markets hypothesis B) market substitution theory C) biased expectation theory D) unbiased expectations theory […]
Date: September 19th, 2020
The costs associated with the issuance of debt, or flotation costs, are generally of secondary consideration and are typically ignored in cost of debt estimates. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
According to ________, investors’ demands for dividends fluctuate over time. A) the catering theory B) Modigliani and Miller theory C) the residual theory of dividends D) CAPM theory ANSWER A
Date: September 19th, 2020
Use the information in Table 4.1 to determine the 2013 current ratio for Bacon Signs. A) $3,908/$2,943 = 1.33 B) $3,527/$2,250 = 1.57 C) $3,170/$2,943 = 1.08 D) $713/$2,943 = 0.24 ANSWER A Explanation: A) CR = CA / CL
Date: September 19th, 2020
