High Tech Corp. cut its research and development budget in 2010 by $4,000,000 in order to improve its cash flow for the year. Which of the following statements is MOST correct? A) The stock price will likely increase because the value of stock is based on reported cash flow. B) The change will have no […]
Date: September 19th, 2020
The present value of a single future sum of money is inversely related to both the number of years until payment is received and the discount rate. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A firm’s income statement reports the results from operating the business for a period of time, while the firm’s balance sheet provides a snapshot of the firm’s financial position at a specific point in time. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Actual returns are always less than expected returns because actual returns are determined at the end of the period and must be discounted back to present value. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The same underlying formula is used for computing both the future value and present value. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Operating profits or EBIT is used to measure a firm’s profits on assets because it does not include the firm’s cost of debt financing. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Accounting profits is the most relevant variable the financial manager uses to measure returns. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The CEO of JLI Corp. decided to expand into a new market in 2010. At the end of 2010, JLI’s stock price had decreased 5% since the beginning of the year. Which of the following statements is MOST correct? A) The CEO made a poor decision to expand because the stock price decreased during the […]
Date: September 19th, 2020
A car manufacturer offers either $2,000 cash back or zero percent financing for 5 years. A rational consumer will always take the cash back because money received today is worth more than money received in the future. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following is NOT a benefit provided by the existence of organized security exchanges? A) establishing and publicizing fair security prices B) standardization of all debt agreements C) helping businesses raise new capital D) providing a continuous market ANSWER B
Date: September 19th, 2020
