You are going to pay $800 into an account at the beginning of each of 20 years. The account will then be left to compound for an additional 20 years until the end of year 40, when it will turn into a perpetuity. You will receive the first payment from the perpetuity at the end […]
Date: September 19th, 2020
Which of the following statements about International Financial Reporting Standards (IFRS) is NOT true? A) IFRS offers simplicity but also possibly more leeway for accounting malpractice than does GAAP. B) In 2008, the Securities and Exchange Commission (SEC) announced its plan to convert U.S. companies from GAAP to IFRS. C) IFRS sets out broad and […]
Date: September 19th, 2020
Gremlin Media Inc. has realized tremendous growth in recent years. Last year the firm realized an ROE of 41.16%. If the firm was in a 40% marginal tax bracket, had an asset turnover ratio of 2.1, a profit margin of 14%, and a leverage ratio of 2, what was the firm’s retention ratio? A) 0.70 […]
Date: September 19th, 2020
Eagle Enterprises Inc., has an asset turnover of 1.1, a financial leverage ratio of 1.67, a profit margin of 12% and a dividend payout ratio of 25%. What is the firm’s sustainable growth rate? A) 29.39% B) 14.07% C) 5.51% D) 16.53% ANSWER D Explanation: D) Sustainable Growth = ROE * b = […]
Date: September 19th, 2020
Asset values on the balance sheet should reflect their acquisition costs. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
In the ISO Commercial Crime Coverage form, robbery is defined as the A) unlawful taking of property to the deprivation of the insured. B) unlawful taking of property from the care and custody of a person by someone who has caused or threatens to cause bodily harm or who has committed an unlawful act witnessed […]
Date: September 19th, 2020
International Financial Reporting Standards (IFRS) is a set of principle-based accounting standards that were established by the International Accounting Standards Board (IASB). Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Optimal capital structure “first” criteria suggests that SHAREHOLDER CONTROL should be ________ and that the best way to obtain that is with ________ levels of debt and ________ levels of equity. A) high; high; low B) low; low, high C) low; high; low D) high; low; high ANSWER A
Date: September 19th, 2020
Over the period 1926 to 2014, the standard deviation of returns has been the greatest for which of the following? A) common stocks B) Treasury bills C) corporate bonds D) government bonds ANSWER A
Date: September 19th, 2020
The head teller of a bank embezzled $50,000 from the bank. Which insuring agreement in a financial institution bond is designed to cover such losses? A) Insuring Agreement A—Fidelity B) Insuring Agreement B—On Premises C) Insuring Agreement C—In Transit D) Insuring Agreement D—Forgery or Alteration ANSWER Answer: A
Date: September 19th, 2020
