Question
1. _____________ are expenses that have already been paid and cannot be recovered. 1) Depreciation 2) Incremental cash flows 3) Variable costs 4) Sunk costs
1. _____________ are expenses that have already been paid and cannot be recovered.
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| 1) | Depreciation |
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| 2) | Incremental cash flows |
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| 3) | Variable costs |
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| 4) | Sunk costs |
2. Finance indicates that over the long-term the primary goal of managers of publicly-owned firms should be to:
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| 1) | increase tax shields. |
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| 2) | minimize expected earnings per share. |
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| 3) | remove all chance of losses. |
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| 4) | maximize shareholder wealth (or maximize stock price). |
2. Which of the following statements regarding financial ratio analysis are correct?
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| 1) | Ratio analysis makes comparisons easier by standardizing numbers. |
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| 2) | It is always straightforward to choose firms for ratio comparison for large firms that operate different divisions across several different industries. |
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| 3) | Financial ratio comparisons are NOT impacted by seasonal and accounting differences across firms. |
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| 4) | Financial ratios cannot be compared across time. |
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