A financial manager is considering two projects, A and B; both are expected to add $5 million to profits. Project A is expected to add $5 million to profits this year, while Project B is expected to add $1 million to profits each year over the next five years. Which of the following statements is […]
Date: September 19th, 2020
Based on the information in Table 3-1, calculate the amount of dividends paid by Jones Company in 2010 (no assets were disposed of during the year, and there was no change in interest payable or taxes payable). A) $4,000 B) $2,000 C) $3,500 D) $2,500 ANSWER B
Date: September 19th, 2020
A group of investment bankers organized to distribute large securities issues is known as a syndicate. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following goals are in the best long-term interest of shareholders? A) Profit maximization B) Risk minimization C) Maximizing the market value of the existing shareholders’ common stock D) Maximizing sales revenue ANSWER C
Date: September 19th, 2020
The manager of Golden Ray Corporation receives a bonus if company profits exceed $1,000,000 this year. During the final week of the year, the manager changes an accounting policy that will increase reported profits from $950,000 to $1,025,000, triggering his bonus. The change in profits of $75,000 will reverse itself in the next year, and […]
Date: September 19th, 2020
Some insurance companies intentionally seek to insure motorists with poor driving records. These insurers commonly insure drivers who have been turned-down or canceled by other insurers. What name is given to insurers who provide coverage to these higher-than-average risks drivers? A) alien insurers B) guaranty fund insurers C) specialty insurers D) surplus lines insurers […]
Date: September 19th, 2020
Some states do not require an individual to demonstrate the ability to pay an automobile liability claim until after the individual has been involved in an accident or has been convicted for certain offenses, such as driving under the influence of alcohol. This approach to dealing with compensating innocent auto accident victims is called a(n) […]
Date: September 19th, 2020
The residual market for auto insurance is designed to provide insurance to A) superior risks who qualify for substantial discounts. B) owners of vintage/antique autos where the replacement cost far exceeds the actual cash value. C) drivers who are unable to obtain coverage in the standard market. D) businesses that need to insure a fleet […]
Date: September 19th, 2020
Liquidity refers to the ability to quickly convert an asset into cash without lowering the selling price. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
In measuring value, the firm’s focus should be on: A) cash flow. B) accounting profits. C) time value of money. D) earnings per share. ANSWER A
Date: September 19th, 2020
