Common-sized balance sheets A) show each balance sheet account as a percentage of total assets. B) show each balance sheet account as a percentage of total sales. C) show data for companies in the same industry. D) show data for companies with approximately the same amount of assets. ANSWER A
Date: September 19th, 2020
Gross profit is equal to A) sales – cost of goods sold. B) earnings before taxes minus taxes payable. C) profits plus depreciation. D) revenues – expenses. ANSWER A
Date: September 19th, 2020
The increase in owners’ equity for a given period is equal to A) net income minus dividends. B) sales minus dividends. C) positive net cash flow minus dividends. D) gross profit minus distributions to shareholders. ANSWER A
Date: September 19th, 2020
All of the following are benefits of organized stock exchanges EXCEPT A) increased stock price volatility. B) fair security prices. C) easier access to new capital for business expansion. D) continuous markets. ANSWER A
Date: September 19th, 2020
The expected return on a riskless asset is greater than zero due to A) an expected return for taxes. B) an expected return for opportunity costs. C) an expected return for delaying consumption. D) irrational investors who believe risk is always present. ANSWER C
Date: September 19th, 2020
A timeline identifies the timing and amount of a stream of cash flows, along with the interest rate it earns. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following is an example of both a capital market and a primary market transaction? A) Microsoft common stock owned by an individual investor is sold to another investor. B) Ford Motor Company sells a new issue of common stock to raise funds through a public offering. C) No transactions occur in both […]
Date: September 19th, 2020
A firm’s financing costs include A) interest expense B) depreciation expense. C) costs of goods sold. D) both A and B. ANSWER A
Date: September 19th, 2020
Timelines are used for simple time value of money problems, but cannot be used for more complex problems. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Joe, a risk-averse investor, is trying to choose between investment A and investment B. If investment A is riskier than investment B and Joe selects investment A anyway, then A) the expected return for investment A will be higher than the expected return for investment B. B) the actual return for investment A will be […]
Date: September 19th, 2020
