EXAM CODE D$3$

$13.$ Various ways of identifying a distressed firm include all of the following except

A$.$ its accumulated losses at the end of the financial year are equal to or exceed its net worth

B$.$ Where demand by the secured creditors of a company represents $50\%$ or more of its outstanding amount of debt

C$.$ its accumulated losses at the end of the financial year are equal to or exceed its net investment

D$.$ there is erosion in the net worth due to accumulated losses to the extent of $50\%$ of its outstanding amount of debt

$14.$ In the area of operating activities, which of the following is an indicator of corporate distress?

A$.$ High rate of rejection of manufactured goods.

B$.$ Rapid increasing debt.

C$.$ High cost of funds.

D$.$ Frequent changes in management.

$15.$ Where there is a "near miss" the seller realizes that the price should have been far higher than what has been given. Which principle of valuation has not been applied by the seller during the valuation process?

A$.$ Principle of Alternatives.

B$.$ Principle of Substitution.

C$.$ Principle of Expectation.

D$.$ Principle of Risk and Return.

$16.$ An analyst compiles the following data for a company:

$\backslash$table$[[,2016,2017,2018],[$ROE$,19\mathrm{.}8\%,20\mathrm{.}0\%,22\mathrm{.}0\%$