Investing activities are concerned with: A) how a firm can best manage its cash flows as they arise in its day-to-day operations. B) vice president of productions and operations. C) managing a firm’s cash budgeting procedures. D) managing a firm’s working capital. ANSWER C
The two principal sources of financing for corporations are A) cash and common equity. B) debt and equity. C) common equity and preferred equity. D) debt and accounts payable. ANSWER B
Michelle had four matching end tables in her home. A fire damaged the home, destroying two of the end tables. Michelle’s home was covered by an unendorsed Homeowners 3 policy. Which of the following is true with regard to the settlement for the end tables in this case? A) Loss to a pair or set […]
Dunweiler Inc, is developing a pro forma income statement for the coming year. The chief financial officer estimates that sales will be $150,000,000. If selling, general, and administrative expenses (SGA) are historically 18% of sales, what are the expected SGA expenses (in dollars)? A) $18,000,000 B) $27,000,000 C) $30,000,000 D) $41,000,000 ANSWER B […]
Jones, Inc. has a current ratio equal to 1.40. Which of the following transactions will increase the company’s current ratio? A) The company pays back $50,000 of its long-term debt. B) The company collects $500,000 of its accounts receivable. C) The company sells $1 million of inventory on credit. D) The company writes a $30,000 […]
All of the following statements about conditions under a Homeowners 3 policy are true EXCEPT A) If an insurer broadens coverage without an additional premium during the policy period, the broadened coverage applies immediately to the present policy. B) A waiver or change in any policy provision must be approved in writing by the insurer […]
The future value of an annuity will increase if the interest rate goes up, but the present value of the same annuity will decrease as the interest rate goes up. Indicate whether the statement is true or false ANSWER TRUE
Determining how a firm should raise money to fund its long-term investments is referred to as capital structure decisions. Indicate whether the statement is true or false ANSWER TRUE
All of the following are equity accounts on a balance sheet EXCEPT A) retained earnings. B) paid-in capital. C) cash. D) common stock. ANSWER C
Baker Corp is required by a debt agreement to maintain a current ratio of at least 2.5, and Baker’s current ratio now is 3. Baker wants to purchase additional inventory for its upcoming Christmas season, and will pay for the inventory with short-term debt. How much inventory can Baker purchase without violating its debt agreement […]