1. The degree of total leverage reflects a firms

Group of answer choices

liquidity profile.

profitability profile.

risk profile.

dividend payment profile.

2. For a mortgage loan, the interest dollar amount included in each succeeding payment will

Group of answer choices

increase.

decrease.

stay the same.

will be equal to the principal included.

3.

One of the principal foundations of the financial concept of the time value of money is

Group of answer choices

simple interest.

compound interest.

add the inflation rate to the interest rate.

the more you spend, the more you make.

4. For a given interest rate, the shorter the time period the

Group of answer choices

A. higher the present value.

B. lower the present value.

C. lower the future value.

D. both answers A&C

5.

If a company has a degree of operating leverage of 2.0, then a 10% increase in sales will result in

Group of answer choices

a 10% increase in EBIT.

a 20% increase in DOL.

a 2% increase in EPS.

a 20% increase in EBIT.

6.

A good example of a liquidity ratio is:

Group of answer choices

Debt ratio

Quick ratio

P/E ratio

Total assets turnover ratio

7.

A companys sales breakeven point is reached when

Group of answer choices

all variable costs are recovered.

total assets are recovered.

all fixed costs are recovered.

all general and administrative costs are recovered.

8.

The investment decision, in maximizing shareholder wealth, includes

debt.

dividend yield.

acquiring assets.

net income.

9.

The contribution margin per unit is the same as

Group of answer choices

net income per unit.

EBIT per unit.

sales per unit.

none of the above

10.

The higher the number of compounding periods in a year

Group of answer choices

the higher the effective interest rate.

the higher the nominal interest rate.

the lower the effective interest rate.

the lower the nominal interest rate.

11.

Which of the following ratios would best indicate a companys ability to satisfy the fixed payments on its debt obligations?

Group of answer choices

Inventory turnover

Net profit margin

Price/earnings ratio

Times interest earned

Thank you!