1. Which of the following are NOT one of the five forces that determine a company's competitive intensity?

A.Threat of entry

B.Bargaining power of suppliers

C.Threat of substitution

D.Ability to obtain financing

2. Which of the following is not a component of shareholders' equity?

A.Noncontrolling Interest

B.All answers listed in this question are components of shareholders' equity

C.Common Stock

D.Preferred Stock

E.Retained Earnings

F.Accumulated Other Comprehensive Income

3. Which of the following is a correct statement?

A.Accounts payable and short-term notes payable are non-operating liabilities.

B.Accrued expenses are non-operating liabilities.

C.All debt are liabilities.

D.All liabilities are debt.

4. What is the correct order of the following steps in preparing a projected income statement (not all steps may be shown)?

I. Project future net sales

II. Project future net income

III. Project future cost of goods sold

IV. Project future interest expense

A.I, II, III, IV

B.I, III, IV, II

C.II, IV, III, I

D.I, III, II, IV

5. Why is debt risky?

A.Debt is an off-balance sheet item.

B.Owners are satisfied before creditors in the case of bankruptcy.

C.Debt is not risky.

D.Debt carries a fixed commitment in the form of interest charges and principal repayment.

6. A company has the following information:

2015 Retained Earnings - $12.0 billion

2016 Net Income - $3.5 billion

2016 CAPEX - $200.0 million

2016 Preferred Dividends - $100.0 million

2016 Cash Dividends - $400.0 million

What is the retained earnings balance at the end of 2016?

A.$14.8 billion

B.$15.0 billion

C.$15.5 billion

D.$15.2 billion