Financial analysis A) uses historical financial statements to measure a company’s performance and in making financial projections of future performance. B) is accounting record-keeping using generally accepted accounting principles. C) uses historical financial statements and is thus useful only to assess past performance. D) relies on generally accepted accounting principles to make comparisons between companies […]
Suppose XYZ Corporation is traded on the New York Stock Exchange. XYZ’s closing price on Monday is $20 per share. After the market closes on Monday, XYZ makes a surprise announcement that it has obtained a major new customer. XYZ’s stock will likely A) open above $20 because the positive news will result in a […]
Corporation B reported earnings per share of $10. Corporation B has 100,000 shares of common stock outstanding and reported an increase in owners’ equity of $400,000 for the period. Corporation B paid $50,000 in interest expense during the period. Corporation B paid dividends per share of A) $14.003. B) $6.00. C) $5.50. D) $6.50. […]
A wealthy private investor providing a direct transfer of funds is called A) a venture capitalist. B) an investment banker. C) an angel investor. D) a financial intermediary. ANSWER C
Which of the following statements about the liability limits of the PAP is (are) true? I. The policy can be written with split limits of liability. II. Prejudgment interest is considered part of the damage award and is subject to the policy limit of liability. A) I only B) II only C) both I and […]
Common examples of financial intermediaries include all of the following EXCEPT A) Pension Funds. B) Mutual Funds. C) Life Insurance Companies. D) Venture Capital Firms. ANSWER D
What information does a firm’s income statement provide to the viewing public? A) an itemization of all of a firm’s assets and liabilities for a defined period of time B) a report of investments made and their cost for a specific period of time C) a report of revenues and expenses for a defined period […]
A corporate manager decides to build a new store on a lot owned by the corporation that could be sold to a local developer for $250,000. The lot was purchased for $50,000 twenty years ago. When determining the value of the new store project, A) the opportunity cost of the lot is $250,000 and should […]
Ratios are used to standardize financial information, thereby making it easier to interpret. Indicate whether the statement is true or false ANSWER TRUE
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
