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
Ratios are used to standardize financial information, thereby making it easier to interpret. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
California Retailing Inc. has sales of $4,000,000; the firm’s cost of goods sold is $2,500,000; and its total operating expenses are $600,000. What is California Retailing’s EBIT? A) $900,000 B) $1,300,000 C) $850,000 D) $875,000 ANSWER A
Date: September 19th, 2020
John calls his stockbroker and instructs him to purchase 100 shares of Microsoft Corporation common stock. This transaction occurs in the A) credit market. B) futures market. C) secondary market. D) primary market. ANSWER C
Date: September 19th, 2020
To measure value, the concept of time value of money is used A) to determine the interest rate paid on corporate debt. B) to bring the future benefits and costs of a project, measured by its expected profits, back to the present. C) to ensure that expected future profits exceed current profits today. D) to […]
Date: September 19th, 2020
Trend analysis is the forecasting of the firm’s financial ratios for a future time period by using its own ratios from previous periods. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A financial manager is evaluating a project which is expected to generate profits of $100,000 per year for the next 10 years. The project should be accepted if A) the cost of the project is less than $1,000,000. B) this project’s expected profits are higher than any other projects the corporation has available. C) the […]
Date: September 19th, 2020
How managers choose to finance the business affects the company’s risk, and as a result, the rate of return stockholders receive on their investments. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A life insurance company purchases $1 billion of corporate bonds from premiums collected on its life insurance policies. Therefore A) the corporate bonds are indirect securities and the life insurance policies are direct securities. B) the corporate bonds are direct securities and the life insurance policies are indirect securities. C) the corporate bonds are direct […]
Date: September 19th, 2020
Investors want a return that satisfies the following expectation(s): A) An additional return for taking on risk B) A return for delaying consumption C) An additional return for accepting dividends rather than capital gains D) Both A and B. ANSWER D
Date: September 19th, 2020
