PLEASE PROVIDE EXPLANATIONS AND/OR EXAMPLES OF HOW TO WORK THE PROBLEM BASED ON YOUR ANSWER SELECTION. I WILL NEED TO REFERENCE THIS FOR PRACTICE IN ORDER TO PREPARE FOR THE EXAM.

1. Which of the following statements concerning accumulated depreciation is most correct?

a. Accumulated depreciation is an income statement item.

b. There is no relationship between depreciation expense on the income statement and accumulated depreciation on the balance sheet.

c. Net fixed assets is equal to gross fixed assets plus accumulated depreciation.

d. Accumulated depreciation appears on the balance sheet under the category "Other Assets."

e. None of the above statements is correct.

2. WeCare HMO is evaluating a new project. It has a coefficient of variation (CV) of 5, while the HMO's average project has a CV of 2-3. The business's corporate cost of capital is 10 percent and the typical adjustment for project risk is 3 percentage points. What is the project cost of capital?

a. 7% b. 10% c. 13% d. 16% e. 19%

3. True or False: Sensitivity analysis measures the risk of a project by showing how much the project's NPV is affected by changes in the input variables such as volume and labor costs. Other things held constant, with changes in the input variable plotted on the horizontal axis and NPV on the vertical axis; the steeper the sensitivity line, the more sensitive the project's profitability is to the input variable.

4. Consider the following balance sheet:

Cash $ 70,000 Accounts payable $ 30,000 Accounts receivable 30,000Long-term debt 20,000 Inventories 50,000Common stock 200,000 Net fixed assets 350,000 Retained earnings 250,000 Total assets $500,000 .Total claims $500,000. Assume that the business uses $30,000 of its cash to pay salaries. Which of the below statements reflects the resulting balance sheet change?

a. There is a change to the left-hand side only.

b. There is a change to the right-hand side only.

c. The cash account decreases by $30,000 and the retained earnings account is reduced by $30,000.

d. The cash account decreases by $30,000 and the long-term debt account is reduced by $30,000.

e. The company does not have the ability to pay $30,000 in salaries.

5. A fire has destroyed a large percentage of the financial records of the Carter Health System. You have the task of piecing together information to prepare a financial report. You have found the profit margin to be 5.4 percent. If sales were $4 million on total assets of $2 million, and the amount of debt financing was $800,000, what was Carter's return on equity (ROE)? (Hint: Use the Du Pont equation to answer this question.)

a. 13.8% b. 18.0% c. 19.2% d. 21.6% e. 25.8%

6. Grady Home Health has a profit margin of 15 percent on sales of $20,000,000. If the firm has debt of $7,500,000 and total assets of $22,500,000, what is Grady's return on assets (ROA)?

a. 13.3% b. 10.9% c. 8.0% d. 5.3% e. 3.1%

7. Which of the following statements about financial statement analysis is most correct?

a. The current ratio measures liquidity.

b. Du Pont analysis is based on the fact that return on equity (ROE) can be expressed as the sum of three other ratios (Ratio 1 + Ratio 2 + Ratio 3).

c. It is relatively easy to interpret a ratio in the absence of comparative and trend data.

d. Both a. and b. above are correct.

e. a., b., and c. above are correct.

8. Consider the following balance sheet:

Cash $ 70,000Accounts payable $ 30,000 Accounts receivable 30,000 Long-term debt 20,000 Inventories 50,000 Common stock 200,000 Net fixed assets 350,000 Retained earnings 250,000 Total assets $500,000 Total claims $500,000. Which of the following statements is most correct?

a. The business is not-for-profit.

b. The business, in the aggregate over time, has been profitable.

c. The business is probably using too much debt financing.

d. The business has $450,000 in its equity accounts (common stock and retained earnings); thus, it has this much money available to spend on new facilities.

e. The business has a short-term bank loan outstanding.

9. Which of the following statements concerning net income versus cash flow is most correct?

a. Net income is a rough measure of a business's cash flow.

b. Net income can be converted into a rough measure of cash flow by adding noncash expenses, typically depreciation.

c. Net income can be converted into a rough measure of cash flow by adding nonoperating income.

d. Net income can be converted into a rough measure of cash flow by adding the provision for bad debts.

e. None of the above statements are correct.

10. Which of the following statements about gross and net patient service revenue is most correct?

a. Gross revenue reports revenue based on chargemaster prices.

b. Net revenue is gross revenue less discounts and charity care.

c. Net revenue is gross revenue less discounts, charity care, and bad debt losses.

d. Both a. and b. above are correct.

e. Both a. and c. above are correct.

11. Which of the following statements about the balance sheet is most correct?

a. The lower (right-hand) section reports cash and other assets.

b. The balance sheet reports on a business's operations.

c. The asset side of the balance sheet is listed in decreasing order of maturity (i.e., longer maturity assets are listed first).

d. The upper (left-hand) section reports liabilities and equity.

e. None of the above statements are correct.

PLEASE PROVIDE EXPLANATIONS AND/OR EXAMPLES OF HOW TO WORK THE PROBLEM BASED ON YOUR ANSWER SELECTION. I WILL NEED TO REFERENCE THIS FOR PRACTICE IN ORDER TO PREPARE FOR THE EXAM. Points will NOT be awarded if the answer doesn't accompany detailed solutions.