Based on the information in Table 4-1, and assuming the company’s stock price is $30 per share, the P/E ratio is A) 9.85. B) 10.99. C) 3.09. D) 4.83. ANSWER B
All of the following statements about business income insurance are true EXCEPT A) Business income is defined as total sales that would have been made if the loss had not occurred. B) Payroll is considered a continuing normal operating expense. C) Business income insurance does not cover the physical damage caused by a peril which […]
Which of the following statements about the business income coverage form is true? A) Business income is defined as gross earnings before taxes. B) Payroll is excluded unless it is specifically added. C) The form covers loss of business income and extra expenses incurred during restoration. D) The form can be used by a manufacturing […]
Which of the following statements about the equipment breakdown protection coverage form is (are) true? I. The covered cause of loss is a breakdown of covered equipment, including boilers, machinery, and electrical and mechanical equipment. II. It provides coverage for the reasonable cost of expediting permanent repair or replacement of damaged property. A) I only […]
The interest coverage ratio is equal to: A) EBIT/interest. B) interest/EBIT. C) (debt + equity)/EBIT. D) EBIT * interest. ANSWER A
Based on the information in Table 3-1, the change in cash for 2010 is A) $4,000. B) $4,950. C) $5,500. D) $5,800. ANSWER D
Based on the information in Table 3-1, calculate the after-tax cash flow from operations for 2008 (no assets were disposed of during the year, and there was no change in interest payable or taxes payable). A) $1,450 B) $5,500 C) $4,300 D) $6,250 ANSWER C
Based on the information in Table 4-1, the inventory turnover ratio is A) 1.3 times. B) 2.5 times. C) 2.0 times. D) 2.9 times. ANSWER C
Which of the following would NOT normally be considered a “flotation cost”? A) printing and engraving expenses B) dividends C) legal fees D) underwriter’s spread ANSWER B
A financial advisor tells you that you can make your child a millionaire if you just start saving early. You decide to put an equal amount each year into an investment account that earns 7.5% interest per year, starting on the day your child is born. How much would you need to invest each year […]