Gross profit is calculated as: A) total sales – cost of sales – selling, general, and administrative expenses – depreciation and amortization. B) total sales – cost of sales – selling, general, and administrative expenses. C) total sales – cost of sales. D) None of the above ANSWER C
Date: September 19th, 2020
If a firm has overdue liabilities or is legally insolvent or bankrupt, most states prohibit its payment of cash dividends. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Working capital management is the management of: A) long-term debt. B) short-term assets and liabilities. C) capital assets and equity. D) short-term debt, long-term debt, and equity. ANSWER B
Date: September 19th, 2020
At a firm level, the lower the cost of raising funds, the more valuable the firm will be. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
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
