A firm whose debt to equity ratio ________ the industry average will ________ future financing flexibility by financing with equity at the next opportunity but doing so may sacrifice earnings per share. A) is less than; maximize B) exceeds; minimize C) exceeds, maximize D) None of the above. ANSWER C
Date: September 19th, 2020
Which of the following losses would be covered under Section II of an unendorsed Homeowners 3 policy? A) The homeowner accidentally dropped a bowling ball, injuring another bowler’s foot. B) The homeowner’s nanny was injured on her day off while hiking at a state park. C) The insured slandered a city council member at a […]
Date: September 19th, 2020
Tom is planning to build a home. He is weighing many factors, including construction materials, location, and other considerations. Which of the following statements is true with regard to homeowners insurance and Tom’s new home? A) The higher the construction costs are in the area, the lower Tom’s homeowners insurance premiums will be. B) The […]
Date: September 19th, 2020
What are the duties of a treasurer? Of a controller? What will be an ideal response? ANSWER The treasurer generally handles the firm’s financial activities, including cash and credit management, making capital expenditure decisions, raising funds, financial planning, and managing any foreign currency received by the firm. The controller is responsible for managing […]
Date: September 19th, 2020
To generate cash to invest in fixed assets, a firm can issue equity or obtain a loan from a bank. This is an example of which cash-related activity in cash flow management? A) Operating activity B) Profitability activity C) Investing activity D) Financing activity ANSWER D
Date: September 19th, 2020
To evaluate or compare investment proposals, we must adjust the value of all cash flows to a common date. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The acid-test ratio of a firm would be unaffected by which of the following? A) Inventories are sold on a short-term credit basis. B) Common stock is sold and the money is invested in marketable securities. C) Inventories are sold for cash. D) Accounts payable are reduced by obtaining a short-term loan. ANSWER […]
Date: September 19th, 2020
Robert purchased an unendorsed Homeowners 3 policy. He is concerned that if his personal property is destroyed, the insurer will take depreciation into consideration when determining the loss settlement and will pay him less than the amount needed to purchase new property. Which endorsement can Robert add to his Homeowners 3 policy to address this […]
Date: September 19th, 2020
Which of the following accounts belongs in the liability section of a balance sheet? A) interest expense B) preferred stock C) accumulated depreciation D) accounts payable ANSWER D
Date: September 19th, 2020
The ________ is the critical connection between the pro forma income statement and the pro forma balance sheet. A) change in net working capital B) change in cost of goods sold C) change in dividends D) change in retained earnings ANSWER D
Date: September 19th, 2020
