Creditors are primarily interested in short-term liquidity of the company and its ability to make interest and principal payments. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A firm’s year-end retained earnings balances are $670,000 and $560,000, for 2014 and 2015 respectively. The firm paid $10,000 in dividends in 2015. The firm’s net profit after taxes in 2015 was ________. A) -$100,000 B) -$110,000 C) $100,000 D) $110,000 ANSWER A
Date: September 19th, 2020
Time-series analysis is the evaluation of a firm’s financial performance in comparison to other firm(s) at the same point in time. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The possibility that the issuer of a bond will not pay the contractual interest or principal payments as scheduled is called default risk. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Nico invested an amount a year ago and calculated his return on investment. He found that his purchasing power had increased by 15 percent as a result of his investment. If inflation during the year was 4 percent, then Nico’s ________. A) real return on investment is more than 15 percent B) nominal return on […]
Date: September 19th, 2020
A firm’s year-end retained earnings balances are $320,000 and $400,000, for 2014 and 2015 respectively. The firm reported net profits after taxes of $100,000 in 2015. The firm’s dividend payment for 2015 is ________. A) $0 B) $20,000 C) $80,000 D) $100,000 ANSWER B
Date: September 19th, 2020
________ rate of interest is the actual rate charged by the supplier and paid by the demander of funds. A) Nominal B) Real C) Risk-free D) Inflationary ANSWER A
Date: September 19th, 2020
A firm has a year-end retained earnings balance of $220,000 for 2014. The firm reported net profits after taxes of $50,000 and paid dividends of $30,000 in 2015. The firm’s retained earnings balance at 2015 year end is ________. A) $240,000 B) $250,000 C) $270,000 D) $300,000 ANSWER A
Date: September 19th, 2020
A firm’s year-end retained earnings balance are $670,000 and $560,000 for 2014 and 2015, respectively. The firm reported net profits after taxes of $100,000 in 2015. The firm paid dividends of ________ in 2015. A) $10,000 B) $100,000 C) $110,000 D) $210,000 ANSWER D
Date: September 19th, 2020
________ rate of interest creates equilibrium between the supply of savings and the demand for investment funds. A) Nominal B) Real C) Risk-free D) Inflationary ANSWER B
Date: September 19th, 2020
