Additional Paid in Capital on the balance sheet equals the amount paid by investors for the company’s common stock that exceeds the market price of the stock at the time of purchase. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
If company A has a lower average collection period than company B, then company A will have a higher accounts receivable turnover. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Cash flows is the most relevant variable to measure the returns on debt instruments, while GAAP net income is the most relevant variable to measure the returns on common stock. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Which of the following refers to all institutions and procedures that provide for transactions in short-term debt instruments generally issued by borrowers with very high credit ratings? A) capital market B) stock market C) money market D) commercial banks ANSWER C
Date: September 19th, 2020
The expected rate of return from an investment is equal to the expected cash flows divided by the initial investment. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Net income is the best measure to use for evaluating a firm’s profits on assets because it includes the effect of financing as well as the effect of operations. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
When evaluating an investment project, which of the following best describes the financial information needed by the decision maker? A) pre-tax accounting profits adjusted for any accounting method changes B) incremental cash flows before taxes so the decision will not be biased by a tax code that may change in the future C) after-tax accounting […]
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
