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 […]
XYZ, Inc. would suffer serious financial consequences if either of its two major customers were shut down and could not purchase XYZ products. Which of the following types of consequential loss protection would provide protection against this exposure? A) leasehold interest B) extra expense C) marine insurance D) business income from dependent properties […]
What is the effect of the optional agreed value provision in the building and personal property coverage form? A) It provides replacement cost coverage. B) It increases insured values along with inflation. C) It suspends the coinsurance clause. D) It reduces the deductible to $50. ANSWER Answer: C
Bill, a local inventor, developed a diet pill that he believes will solve the obesity problem in the United States. Bill wants to create a new company, 50% owned by Bill and 50% owned by a major drug company. Although he believes the pills are safe, Bill is concerned about liability if someone becomes sick […]
What financial statement explains the changes that took place in the firm’s cash balance over a period? A) income statement B) balance sheet C) statement of cash flow D) reconciliation of free cash flow ANSWER C
A 65 year-old man is retiring and can take either $500,000 in cash or an ordinary annuity that promises to pay him $50,000 per year for as long as he lives. Which of the following statements is MOST correct? A) The higher the interest rate, the more likely the man will prefer the $500,000 lump […]
The building and personal property coverage form provides several optional coverages. Under one optional coverage, no deduction is taken for depreciation when settling a covered loss. This optional coverage is called A) extra expense. B) agreed value. C) replacement cost. D) inflation guard. ANSWER Answer: C