1)ExxonMobil generates about $50 billion in cash annually from its operations and invests about half of that on new exploration. Therefore, ExxonMobil is an example of a(n): A) savings surplus unit. B) savings deficit unit. C) investment banker. D) financial intermediary. 2)Three ways that savings can be transferred through the financial markets include all of the following except: A) direct transfer of funds. B) indirect transfer using the investment banker. C) indirect transfer using the venture capital firm. D) indirect transfer using the financial intermediary. 3)An analyst is evaluating two companies, A and B. Company A has a debt ratio of 50% and Company B has a debt ratio of 25%. In his report, the analyst is concerned about Company B's debt level, but not about Company A's debt level. Which of the following would best explain this position? A) Company B has much higher operating income than Company A B) Company A has a lower times interest earned ratio and thus the analyst is not worried about the amount of debt C) Company B has a higher operating return on assets than Company A, but Company A has a higher return on equity than Company B D) Company B has more total assets than Company A 4)Baker Corp. is required by a debt agreement to maintain a current ratio of at least 2.5, and Baker's current ratio now is 3. Baker wants to purchase additional inventory for its upcoming Christmas season, and will pay for the inventory with short-term debt. How much inventory can Baker purchase without violating its debt agreement if their total current assets equal $15 million? A) $0.50 million B) $1.67 million C) $4.50 million D) $6.00 million 5)Williams Inc. has a current ratio equal to 3, a quick ratio equal to 1.8, and total current assets of $6 million. William's inventory balance is A) $2,000,000. B) $2,400,000. C) $4,000,000. D) $4,800,000. 6)Jones, Inc. has a current ratio equal to 1.40. Which of the following transactions will increase the company's current ratio? A) The company collects $500,000 of its accounts receivable B) The company sells $1 million of inventory on credit C) The company pays back $50,000 of its long-term debt D) The company writes a $30,000 check to pay off some existing accounts payable 7)For a retailer with inventory to sell, the acid-test ratio will be A) less than the current ratio, thus providing a more stringent measure of liquidity. B) greater than the current ratio, thus providing a more stringent measure of liquidity. C) greater than the current ratio, thus providing a less stringent measure of liquidity. D) unimportant because it doesn't include inventory