Finance

Baker Corp is required by a debt agreement to maintain a current ratio

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 […]

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Date: September 19th, 2020

Which of the following statements about the replacement cost provision

Which of the following statements about the replacement cost provision of the Homeowners 3 policy is true? A) It applies to personal property losses only. B) Except for small losses, the insured must repair or replace the damaged property in order to receive full replacement cost. C) The insured is required to carry an amount […]

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Date: September 19th, 2020

Which of the following statements about covered perils under the perso

Which of the following statements about covered perils under the personal property coverage (Coverage C) of the Homeowners 3 policy is true? A) Theft losses to boats and watercraft are covered only if they occur at the insured’s residence. B) Damage from an explosion is covered only if the explosion is the result of fire […]

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Date: September 19th, 2020

Wheeler Corporation had retained earnings as of 12/31/10 of $15 millio

Wheeler Corporation had retained earnings as of 12/31/10 of $15 million. During 2011, Wheeler’s net income was $7 million. The retained earnings balance at the end of 2011 was equal to $20 million. Therefore, A) Wheeler paid a dividend in 2010 of $5 million. B) Wheeler purchased treasury stock in 2010 for $2 million. C) […]

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Date: September 19th, 2020

David has a Homeowners 3 policy that provides $280,000 of insurance on

David has a Homeowners 3 policy that provides $280,000 of insurance on his dwelling, which has a current replacement value of $400,000. Ignoring any deductible, how much will David collect if a roof with a replacement value of $16,000 but an actual cash value of $10,000 is destroyed in a fire? A) $10,000 B) $12,000 […]

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Date: September 19th, 2020

You are thinking of adding one of two investments to an already well-

You are thinking of adding one of two investments to an already well- diversified portfolio. Security A Security B Expected Return = 14% Expected Return = 16% Standard Deviation of Standard Deviation of Returns = 16% Returns = 20% Beta = 1.2 Beta = 1.2 If you are a risk-averse investor, which one is the […]

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Date: September 19th, 2020

Which of the following statements about the additional coverages under

Which of the following statements about the additional coverages under Section I of the Homeowners 3 policy is true? A) There is coverage for the reasonable cost incurred to protect property from further damage after a covered loss occurs. B) There is unlimited coverage for furnishings of the landlord in an apartment on the premises […]

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Date: September 19th, 2020

All of the following are additional coverages under Section I of the H

All of the following are additional coverages under Section I of the Homeowners 3 policy EXCEPT A) the reasonable expenses of removing debris after an insured loss. B) fire department service charges for which the insured is liable by contract or agreement. C) damage to trees and shrubs caused by a windstorm. D) losses incurred […]

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Date: September 19th, 2020