The theory that exchange rates must adjust so that there is no reason for funds to flow from one country just to take advantage of better returns in another is part of: A) Purchasing power parity B) Purchasing power arbitrage C) Interest rate parity D) Interest rate arbitrage ANSWER C
Date: September 19th, 2020
The DuPont analysis calculates ROE as the product of A) leverage, market value, and turnover. B) margin, turnover, and leverage. C) profitability, liquidity, and leverage. D) activity, leverage, and debt. E) margin, profitability, and leverage. ANSWER B
Date: September 19th, 2020
Each of the following is a decision that can be avoided if a firm refuses to offer credit EXCEPT: A) Collection period B) Discounts to give fast payers C) Accounts Payable D) Who to extend credit to ANSWER C
Date: September 19th, 2020
If a firm uses the EOQ model to manage its inventory and its managers decide to hold safety stock, its A) reorder costs will fall. B) processing costs will fall. C) orders will be less frequent. D) shortage costs will rise. E) first order is increased to include the extra number of units sold. […]
Date: September 19th, 2020
Your banker is concerned about your company’s liquidity. Which of the following actions would increase the firm’s current ratio and ease the bank’s concern? A) Sell some inventory for cash. B) File for bankruptcy. C) Call your convertible bonds and thereby force the bond holders to become shareholders. D) Sell some of the firm’s long-term […]
Date: September 19th, 2020
As the number of units per order ________, total carrying costs ________. A) increases; stay the same B) increases; increase C) decreases; increase D) decreases; stay the same E) increases; decrease ANSWER B
Date: September 19th, 2020
Blockbuster Inc. Income Statement for year-ended Dec 31 ($000’s) Year 1 Year 2 Sales 4,969,100 5,157,600 COGS 2,036,000 2,420,700 SG&A 2,390,600 2,532,400 Depreciation 279,000 246,600 Amortization of Intangibles 180,100 176,100 Operating Income (Loss) 83,400 -218,200 Interest Expense 116,500 78,200 Income Before Tax -33,100 -296,400 Income Tax Expense 45,400 -56,100 Net Income -78,500 -240,300 Referring to […]
Date: September 19th, 2020
The ________ represents a best guess as to what the spot rate will be in the future. A) PPP B) Arbitrage C) Exchange rate D) Forward rate ANSWER D
Date: September 19th, 2020
All of the following are part of a financial analysis EXCEPT A) examining the strengths and weaknesses of the firm. B) performing a means-end analysis. C) calculating the DuPont ratio. D) analyzing the competition. E) performing an industry analysis. ANSWER B
Date: September 19th, 2020
The minimum level of inventory a firm keeps on hand. A) EOQ B) Safety Stock C) Reorder Point D) Optimum Inventory Level ANSWER B
Date: September 19th, 2020
