Market ratios differ from other ratios because A) they are based on information not contained in the firm’s financial statements. B) they are the only ratios that may have negative values. C) they are the most important ratios to shareholders. D) they are the only ratios that relate equity measures to other variables. E) they […]
A firm has sales of $1 million, net income of $250,000, total current assets of $300,000, and accounts receivable of $200,000. The firm’s accounts receivable turnover is A) 0.33 times. B) 0.20 times. C) 1.50 times. D) 5.00 times. E) 1.25 times. ANSWER D
If the inflation rate in the United States is expected to average 4% in the future and the inflation rate in Denmark is expected to average 7%, what spot rate is expected to be in effect in three years? Assume the Danish kroner per U.S. dollar exchange rate is now $0.20. A) $0.245 B) $0.219 […]
Carrying costs per unit are $3.00. An average order contains 200 units. According to the economic order quantity model, what are total carrying costs? A) $300 B) $67 C) $600 D) $400 E) $565 ANSWER A
What is the maximum net profit to a speculator with $1 million if interest rates on 1-year Treasuries are 6% in France, 4% in the United States and the exchange rate is expected to change from today’s rate of 2Fr/$ to 2.1Fr/$ in 1 year? A) $1,060,000 B) $1,005,683 C) $1,040,000 D) $1,050,000 E) $1,009,524 […]
A theory stating that changes in inflation rates between two countries cause exchange rates to adjust is A) interest rate parity. B) exchange rate parity. C) relative purchasing power parity. D) absolute purchasing power parity. E) None of the above ANSWER C
The cost of obsolescence, damage, and theft is considered part of: A) Shortage Costs B) Opportunity Costs C) Carrying Costs D) Insurance Costs ANSWER C
A firm has current assets of $350,000, current liabilities of $200,000, cost of goods sold of $250,000, and inventory of $75,000. The firm’s inventory turnover is A) 5.0 times. B) 3.3 times. C) 2.7 times. D) 2.0 times. E) 4.7 times. ANSWER B
B&O Railroad Inc transports industrial products and supplies throughout the North Eastern United States. Selected financial information for B&O is provided in the table below. B&O is considering a stock dividend of 5%. What will earnings-per-share be after the dividend? B&O Railroad Inc Selected Financial Information Stock Price $68 EPS $6.00 Dividends per share $1.24 […]
Car-Quake Stereo plans to sell 500 bass boosters this year. If the carrying cost per unit is $1 and the cost per order is $25, what is the optimal number of units per order? A) 150 B) 168 C) 125 D) 173 E) 158 ANSWER E
