One inland marine coverage form is the accounts receivable coverage form. In which of the following cases would the purchaser of this form (the insured) be indemnified through the coverage? A) if the insured cannot pay amounts owed because the purchaser has become insolvent B) if the insured cannot pay amounts owed because the purchaser […]
The Colorado Jet Boat Company had a cash balance of $3 million at the beginning of 2010. During 2010, Sales were $8 million and expenses were $7 million. Therefore, A) the cash balance at the end of 2010 must be less than $11 million. B) the cash balance at the end of 2010 must be […]
The ability to understand the short-term and long-term impact of investment decisions is a fundamental concept that a nonfinancial manager should understand in order to: A) better assess the current environment in which the firm operates. B) better assess future financing requirements. C) better understand the role of capital markets in raising long-term funds. D) […]
Reimbursement for spoilage of frozen food caused by failure of a refrigeration unit at a frozen foods processor can be covered under A) equipment breakdown insurance. B) extra expense insurance. C) builders risk insurance. D) difference in conditions insurance. ANSWER Answer: A
The Sarbanes-Oxley Act of 2002, in order to protect investors, requires a higher level of accountability for which of the following groups? A) public accountants B) boards of directors C) corporate officers D) all of the above ANSWER D
Limited partnerships are not as prevalent as corporations because A) it is easier to transfer ownership by selling common stock than it is to sell partnership. B) limited partnerships have the disadvantage of double taxation. C) limited partners can lose up to three times the amount they invested in the partnership if the business goes […]
Creative Industries Inc is looking to finance a new project with either debt or equity. The firm anticipates that its breakeven EPS-EBIT point is when EBIT reaches $3,000,000. If the projected EBIT are $3,500,000 for the foreseeable future, then to maximize EPS the firm should issue: A) equity. B) debt C) preferred shares. D) a […]
The costs associated with issuing securities to the public can be high. Some types of securities have greater expenses associated with them than others. Which of the following is the most costly security to issue? A) common stock B) preferred stock C) corporate bonds D) all of the above ANSWER A
Which of the following statements about the condominium commercial-unit owners coverage form is (are) true? I. It provides coverage for the unit owner’s proportionate financial interest in the condominium building. II. It provides coverage for the business personal property of the unit owner. A) I only B) II only C) both I and II D) […]
You are 21 years old today. Your grandparents set up a trust fund that will pay you $25,000 per year for 20 years, starting on your 65th birthday to supplement your retirement. If the trust can earn 7.5% per year, how much will your grandparents need to put in the trust fund today (rounded to […]
