Which of the following is NOT included as a tax-deductible expense? A) Dividend expenses B) Marketing expenses C) Depreciation expenses D) Cost of goods sold ANSWER A
Date: September 19th, 2020
It is possible for a firm to generate an after-tax profit on an investment but to still consider the project unacceptable due to insufficient return. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Since lenders are generally reluctant to grant loans to a firm to pay dividends, the firm’s ability to pay cash dividends is generally constrained by the amount of excess cash available. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Legal constraints prohibit the payment of cash dividends until a certain level of earnings has been achieved or limit the amount of dividends paid to a certain dollar amount or percentage of earnings. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following statements is TRUE? A) The after-tax cost of debt is less than the before-tax cost of debt for a corporation with a tax rate greater than 0.00%. B) The after-tax cost of preferred shares is less than the before-tax cost of preferred shares for a corporation with a tax rate greater […]
Date: September 19th, 2020
The average age of inventory ratio would most likely be considered: A) a profitability ratio. B) a leverage ratio. C) a working capital measure. D) a debt ratio. ANSWER C
Date: September 19th, 2020
A firm’s cost of capital is: A) the average cost of raising funds. B) the key driver of the overall value of the firm. C) reflects the required rate of return of investors and lenders. D) All of the above. ANSWER D
Date: September 19th, 2020
The statement of financial performance is known as the: A) statement of cash flows. B) statement of stockholders’ equity. C) balance sheet. D) income statement. ANSWER D
Date: September 19th, 2020
If a firm’s Return on Invested Capital (ROIC) is consistently greater than the firm’s cost of capital, then: A) the firm should consider borrowing more money in an effort to increase the cost of capital. B) this should help drive up the stock price. C) the firm’s net working capital is too low. D) All […]
Date: September 19th, 2020
Which of the following is NOT included as operating income? A) Cost of goods sold B) Sales C) Operating expenses D) Taxes ANSWER D
Date: September 19th, 2020
