• $1.$What is the starting point in doing a projected discounted cash flows analysis?A$.$ Start with the projected increase in assets.B$.$ Start with the required interest rate.C$.$ Start with the sale forecast.D$.$ Start with the expense forecast.$2.$Which operating cash flow item is converted from the income statement by an adjustment that fully offsets the amount in the income statement?A$.$ depreciation expenseB$.$ net incomeC$.$ salesD$.$ cost of goods sold$3.$What is the correct way to look at a statement of cash flows?A$.$ A statement of cash flows replaces an income statement evaluating a business.B$.$ A statement of cash flows provides information that is not used in evaluating a business.C$.$ A statement of cash flows does not replace an income statement in evaluating business.D$.$ A statement of cash flows provides the same information as an income statement in evaluating business.$4.$You are interested in a used specialty machine that would cost $$110,000$ new, would have a lifespan of ten years, and a $$10,000$ salvage value. If the machine is five years old, what is the fair value price?A$.100000$B$.10000$C$.55000$D$.60000$$5.$ After making all your forecasts for next year, you are left with accounts payable that will be $$10,000$ higher than this year. Which implication does this have for the next year?A$.$ Your sales must increase by $$10,000$ over your forecast.B$.$ Your retained earning will be reduced by $$10,000.$C$.$ You will need an additional $$10,000$ in paid$-$in$-$capital.D$.$ Your payable have been incorrectly forecasted.$6.$ Which ratio indicates the market expectations of the highest potential for future growth?A$.$ ABC inc., with a P$/$E ratio of $55$B$.$ XYZ inc., with a P$/$E ratio of $25$C$.$ JKL inc., with a debt ration of $75$D$.$ EFG inc., with a current ration of $4$$7.$ Why should a company prepare forecasted financial statements?A$.$ to satisfy the reporting requirements of the Securities and Exchange Commission.B$.$ to set a baseline against which to compare future results.C$.$ to present growth estimates to potential investors.D$.$ to try options out on paper before implementing them.$8.$ Why is the DuPont framework used in analyzing a company's performance?A$.$ to determine a company's profitability.B$.$ to understand why a company's ROE has changed.C$.$ to determine the return on investment for a company.D$.$ to understand changes in a company's efficiency.$9.$Which company would have the lowest price$-$to$-$sales ratio?A$.$ LMN Corp. has a $6\mathrm{.}5\%$ return on sale, and $3\mathrm{.}5\%$ expected sales growth.B$.$ EFG Inc. has a $3\mathrm{.}5\%$ return on sales, and $4\mathrm{.}5\%$ expected sales growth.C$.$ RST Inc. has a $6\mathrm{.}5\%$ return on sales, and $5\mathrm{.}0\%$ expected sales growth.D$.$ ABC Corp. has a $3\mathrm{.}5\%$ return on sales, and $3\mathrm{.}5\%$ expected sales growth.$10.$When you are analyzing your company's financial performance, which ratio shows you the company's liquidity?A$.$ price$-$eating ratioB$.$ debt ratioC$.$ return on equity ratioD$.$ current ratio
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