Universal Financial, Inc. has total current assets of $1,200,000; long-term debt of $600,000; total current liabilities of $500,000; and long-term assets of $800,000. How much is the firm’s net working capital? A) $900,000 B) $600,000 C) $700,000 D) $1,000,000 ANSWER C
Date: September 19th, 2020
Which of the following best describes the ultimate task of the financial managers? A) Profit maximization B) Risk minimization C) Maximization of shareholders’ wealth D) None of the above ANSWER C
Date: September 19th, 2020
Which of the following accounts does NOT belong in the equity section of a balance sheet? A) long-term debt B) preferred stock C) paid-in-surplus D) retained earnings ANSWER A
Date: September 19th, 2020
Liability arising out of which of the following is covered under Coverage E of an unendorsed Homeowners 3 policy? A) use of the insured’s auto on a public road B) use of the insured’s golf cart at a golf course C) use of the insured’s motorcycle on a highway D) use of the insured’s 40-foot […]
Date: September 19th, 2020
Which of the following statements regarding the Coverage E limit in the homeowners policy is true? A) It is an aggregate limit, and once the amount paid for one or more claims reaches the limit, no additional coverage is provided. B) The limit applies only if a court orders the insured to pay—there is no […]
Date: September 19th, 2020
The current ratio of a firm would be increased by which of the following? A) Land held for investment is sold for cash. B) Inventories are sold for cash. C) Inventories are sold on a credit basis. D) Equipment is purchased, financed by a long-term debt issue. ANSWER A
Date: September 19th, 2020
The value of a bond investment, which provides fixed interest payments, will increase when discounted at an 8% rate rather than at an 11% rate. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following statements is (are) true concerning the home business insurance coverage endorsement? I. It increases the coverage on business personal property at the insured residence from $2,500 to the Coverage C limit. II. It excludes coverage for liability arising out of the home business. A) I only B) II only C) both […]
Date: September 19th, 2020
John purchased an unendorsed Homeowners 3 policy. The coverage will expire next month. Which of the following changes will lower the premium that John will pay? A) reducing the deductible B) adding a replacement cost endorsement for personal property C) switching to an HO-2 policy D) adding a personal injury endorsement ANSWER Answer: […]
Date: September 19th, 2020
The main duties of financial managers are: A) assessing the current business situation and future financing needs. B) developing long-term financing strategies. C) assessing future investments. D) All of the above. ANSWER D
Date: September 19th, 2020
