A corporation has annual sales of $18 million, total assets of $4 million, a debt ratio of 40%, depreciation expense of $200,000, and a tax rate of 40%. The corporation’s total stockholders’ equity is equal to A) $2,800,000. B) $2,400,000. C) $1,800,000. D) $5,600,000. ANSWER B
Date: September 19th, 2020
All of the following statements about the boatowners package policy are true EXCEPT A) Physical damage coverage for the boat is usually written to cover all losses except those losses specifically excluded. B) Liability coverage is provided for bodily injury only. C) Some policies provide optional uninsured boaters coverage. D) Medical payments coverage for water-skiers […]
Date: September 19th, 2020
Which of the following coverages are provided by an unendorsed ISO Dwelling Program form? I. Theft of personal property II. Named-perils coverage for personal property A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: B
Date: September 19th, 2020
Which of the following statements about the Personal Articles Floater is (are) true? I. It is designed to cover several classes of personal property. II. Coverage is written on an “open perils” (all-risks) basis. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: C
Date: September 19th, 2020
Which of the following is a characteristic of most inland marine floater policies? A) The insurance can be tailored to the specific type of personal property insured. B) Coverage amounts are pre-specified by the insurer and cannot be changed. C) Coverage is normally written on a named-perils basis. D) Covered property is insured only when […]
Date: September 19th, 2020
Given an accounts receivable turnover of 10 and annual credit sales of $900,000, the average collection period is A) 90 days. B) 40.56 days. C) 36.50 days. D) 18.25 days. ANSWER C
Date: September 19th, 2020
The benefits of diversification occur as long as the investments in a portfolio are not perfectly positively correlated. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A pro forma balance sheet typically begins with the assets and then we estimate the liabilites and equity. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
If the interest rate is positive, a six-year ordinary annuity of $500 per year must have a present value over $3,000. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
In general, financial managers are concerned with which of the following? A) Creating economic wealth B) Making investment decisions that optimize economic value C) Making business decisions that optimize economic wealth D) All of the above ANSWER D
Date: September 19th, 2020
