As the ratio of current assets to total assets increases, a firm’s risk increases. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The financial manager needs help in producing the best estimates of the future costs of production. Where does this help come from? Where does this help come from? A) Marketing manager B) Production manager C) Human resources manager D) All of these ANSWER Answer: D
Date: September 19th, 2020
At the end of a project’s life, we will recover any initial changes in ________ from the beginning of the project. A) working capital B) depreciation C) taxes D) start-up costs ANSWER Answer: A
Date: September 19th, 2020
To project the appropriate anticipated cash flow for a project, we must put all cash flow knowledge together. This includes ________ of the incremental cash flow. A) both the amount and timing B) the amount C) the timing D) the amount but not the timing ANSWER Answer: A
Date: September 19th, 2020
We can use the ________ to estimate a project’s operating cash flows each period. A) modified income statement format B) income statement format C) balance sheet format D) annual report format ANSWER Answer: A
Date: September 19th, 2020
If the selling price of an asset at disposal is greater than its book value, then the after-tax cash flow is the selling price minus the tax on the gain. Indicate whether the statement is true or false. ANSWER Answer: TRUE
Date: September 19th, 2020
A firm that is unable to pay its bills as they come due is said to be insolvent. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Means by which the securities markets serve to mitigate principal-agent or information asymmetry problems include all of the following EXCEPT: a. Management realizes that its reputation with investors is valuable, and can be sustained only if accurate information is provided on a timely basis. b. Various market mechanisms exist to discipline a firm’s management, and […]
Date: September 19th, 2020
Book value is the original cost of an asset plus the accumulated depreciation. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Book value is the original cost of the asset MINUS the accumulated depreciation.
Date: September 19th, 2020
Fully depreciated assets have a positive book value, and so any proceeds from sale at disposal are taxable gains. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Fully depreciated assets have A BOOK VALUE OF ZERO, and so any proceeds from sale at disposal are taxable gains.
Date: September 19th, 2020
