FIN 200 CheckPoint Week Four Quiz

This work of FIN 200 CheckPoint Week Four Quiz consists of:

1) A rapid rate of growth in sales may require

A. increased borrowing by the firm to support the sales increase.

B. sales forecasts to be made less frequently.

C. the firm to be more lenient with credit customers.

D. higher dividend payments to shareholders.

2) Net cash flow is equal to:

A. income after taxes minus dividends.

B. cash receipts minus cash payments minus depreciation.

C. cash receipts minus cash payments.

D. income after taxes minus depreciation.

3) A firm has beginning inventory of 300 units at a cost of $11 each. Production during the period was 650 units at $12 each. If sales were 700 units, what is the value of the ending inventory using LIFO?

A. $3,250

B. $2,550

C. $3,300

D. $2,750

4) A firm utilizing FIFO inventory accounting would, in calculating gross profits, assume that

A. all sales were from beginning inventory.

B. all sales were for cash.

C. sales were from beginning inventory until it was depleted, and then use sales from current production.

D. all sales were from current production.

5) Combined leverage is concerned with the relationship between

A. changes in volume and changes in EPS.

B. changes in EBIT and changes in net income.

C. changes in volume and changes in EBIT.

D. changes in EBIT and changes in EPS.

6) Which of the following is concerned with the change in operating profit as a result of a change in volume?

A. Break-even point

B. Combined leverage

C. Operating leverage

D. Financial leverage

7) 1 If sales volume exceeds the break-even point, the firm will experience

A. an operating profit.

B. an increase in stock price.

C. an increase in plant and equipment.

D. an operating loss.

8) A weakness of breakeven analysis is that it assumes:

A. prices and costs increase when the economy is strong and confidence is high.

B. there is no weakness.

C. cost of goods sold goes up as revenue increases.

D. revenue and costs are a linear (constant) function of volume.

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