A point to keep in mind is that financial managers should consider taking less financial risk when operating risk is high, but may consider taking more financial risk when operating risk is low. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The following two items are from Marcia White’s “Dining Out” expense category: 1. January monthly variance = $25 (favorable); 2. February cumulative variance = -$10 (unfavorable). If Marcia budgeted $85 a month for this activity, we know that she A) spent $60 in January and $95 in February. B) spent $60 in January and $120 […]
Date: September 19th, 2020
Which of the following is covered under the liability coverage of a businessowners policy? A) damage to the insured’s property B) bodily injury liability C) automobile liability D) professional liability ANSWER Answer: B
Date: September 19th, 2020
Which of the following statements is (are) true concerning the self-insured retention (SIR) under a commercial umbrella liability policy? I. The SIR applies to claims covered by the umbrella policy but not by any underlying insurance. II. The SIR only applies to those claims for which the underlying policy has paid first, and the umbrella […]
Date: September 19th, 2020
Which of the following organizational forms accounts for the greatest number of firms? A) “S” Corporation B) Limited partnership C) Sole proprietorship D) “C” corporation ANSWER C
Date: September 19th, 2020
The nominal interest rate is 7% and the expected inflation rate is 2%. Based on the Fisher effect, the real rate of interest is A) 6.86%. B) 5.0%. C) 4.9%. D) 5.1%. ANSWER C
Date: September 19th, 2020
The auto dealers coverage form pays for damages that the insured is legally obligated to pay because of damage to a customer’s auto left in the insured’s car while it is being serviced or repaired. This coverage is called A) garagekeepers coverage. B) general liability coverage. C) other-than-collision loss coverage. D) acts, errors or omissions […]
Date: September 19th, 2020
Based on the information in Table 3-2, what is Enigma’s cash flow from operations? A) $75,000 B) $105,000 C) $85,000 D) $100,000 ANSWER A
Date: September 19th, 2020
Which of the following forms of business organizations provide limited liability to all its owners? A) general partnership B) corporation C) limited partnership D) both B and C ANSWER B
Date: September 19th, 2020
A regular charge account is one A) that covers a single purchase. B) that is used primarily as a shopping convenience. C) that requires an initial security deposit. D) offered only by travel and entertainment lenders, such as American Express. ANSWER B
Date: September 19th, 2020
