A hypothetical firm currently has $$10$ million market value of assets, and $$5$ million market value of liabilities. With $500,000$ shares of outstanding common stock, what of the following is

true?

Multiple Choice

Market value of equity exceeds book value of equity

Market value per share equals $$20$

Market value of equity equals $$5$ million

Book value per share equals $$10$

None of the answers are correct.

During a particular fiscal year, a small company has sold a product for $$2,000$ with a cost of $$1,000$ to manufacture. However, this firm has not recelved payment for the sale. Its net profit

and cash flow in that period are:

Mutiple Choice

$$$.,000$ and $$2\mathrm{.}000$

$$1,000$ and $-$$$2,000$

$$2,000$ and $$2,000$

$$1,000$ and $-5,000$

$$1,000$ and $$5,000$