Question
Question 1 AN INCREASE IN WHICH OF THE FOLLOWING WILL INCREASE THE QUICK RATIO? I. CASH II. ACCOUNTS RECEIVABLE III. ACCRUALS IV. INVENTORIES V. ACCOUNTS
Question 1
AN INCREASE IN WHICH OF THE FOLLOWING WILL INCREASE THE QUICK RATIO?
I. CASH
II. ACCOUNTS RECEIVABLE
III. ACCRUALS
IV. INVENTORIES
V. ACCOUNTS PAYABLE
A.I, II B. I, II AND V C. I, II AND IV D. I, II AND III
Question 2 THE FIN 301 CORPORATION HAS AN INVENTORY TURNOVER RATIO OF 8 AND SALES OF $5,000,000. ITS CURRENT ASSETS TOTAL $2,000,000 AND ITS CURRENT LIABILITIES TOTAL $1,000,000. THE FIRM'S QUICK RATIO MUST BE _______.
A. 1.425 B. 3.255 C. 2.750 D. 1.375
Question 3
THE FIN 301 CORPORATION CURRENTLY HAS $2,000,000 IN ACCOUNTS RECEIVABLE AND ITS DAYS SALES OUTSTANDING (DS0) IS 42 DAYS. THE FIRM WANTS TO REDUCE ITS DSO TO 30 DAYS BY PRESSURING MORE OF ITS CUSTOMERS TO PAY ITS BILLS ON TIME. IF THIS POLICY IS ADOPTED, THE COMPANY'S AVERAGE SALES WILL FALL BY 10%. WHAT WILL BE THE LEVEL OF ACCOUNTS RECEIVABLE AFTER THE CHANGE? ASSUME A 365 DAY YEAR. (REMEBER TO PICK CLOSEST ANSWER TO YOUR OWN).
A. $1,625,002.41 B. $1,285,714.29 C. $1,593,294.19 D. $1,301,297.39
.
Question 4 THE FIN 301 HAS A CURRENT RATIO OF 2.20. THE FIRM'S DEBT TO ASSETS RATIO IS .45 AND ITS TOTAL ASSETS EQUAL $10,000,000. IF THE FIRM'S LONG-TERM DEBT IS $3,000,000, THEN WHAT MUST ITS CURRENT ASSETS BE?
A. $3,300,000 B. $4,500,000 C. $1,500,000 D. $2,200,000
Question 5 AN CHANGE IN INVENTORIES WILL AFFECT WHICH OF THE FOLLOWING RATIOS?
I. CURRENT RATIO
II. DAYS SALES OUTSTANDING
III. FIXED ASSETS TURNOVER RATIO
IV. TOTAL ASSETS TURNOVER RATIO
V. DEBT TO ASSETS RATIO
A. I AND III B. I, II AND IV C. I, IV AND V D. II, III, AND V
Question 6 A CHANGE IN EQUITY AFFECTS WHICH OF THE FOLLOWING RATIOS?
I. DEBT TO ASSETS
II. ROA
III. ROE
IV. P/E RATIO
V. TOTAL ASSET TURNOVER
A. III ONLY B. I AND III C. II AND IV D. II AND V
Question 7 AS A FIRM'S DEBT RATIO RISES, ITS ______ ALSO RISES (ASSUME A POSITIVE NET INCOME).
I. TOTAL ASSET TURNOVER
II. ROE
III. BEP
IV. EQUITY MULTIPLIER
V. INVENTORY TURNOVER
A. III ONLY B. III AND V C. II AND IV D. I, III AND V
Question 8 THE FIN 301 CORPORATION HAS A GROSS PROFIT MARGIN OF 45% AND GROSS PROFIT OF $2,500,000. THE FIRM'S SALES MUST BE _________ AND ITS COST OF GOODS SOLD MUST BE ________.
A. $5,555,555.56; 3,055,555.56 B. $4,853,232.23; $2,355,585.44 C. $6,333,333.33; $3,555,555.56 D. $7,250,000; $4,750,000
Question 9 A CHANGE IN ACCRUALS WILL AFFECT WHICH OF THE FOLLOWING RATIOS? (REMBER TO PICK THE BEST ANSWER)
I. CURRENT RATIO
II. QUICK RATIO
III. BEP
IV. TOTAL ASSET TURNOVER
V. DEBT TO ASSETS RATIO
VI. ROE
A. I, II, V AND VI B. II, IV AND V C. I, II AND V D. I, II, III, V AND VI
Question 10 THE FIN 301 CORPORATION HAS A DEBT TO ASSETS RATIO OF .35 AND AN ROA OF 5%. THE FIRM'S ROE MUST BE ______.
A. 7.24% B. 6.95% C. 8.32% D. 7.69%
Question 11 WHICH OF THE FOLLOWING COULD CAUSE A FIRM'S ROE TO RISE? (REMEMBER TO SELECT THE BEST ANSWER).
I. DECREASE IN COST OF GOODS SOLD
II. DECREASE IN GROSS PROFIT
III. INCREASE IN EBIT
IV. INCREASE IN ROA
V. DECREASE IN THE EQUITY MULTIPLIER (ASSUME A POSITIVE NET INCOME)
A. I, III AND IV B. I, II AND V C. V ONLY D. IV AND V
Question 12 THE PRESENT VALUE OF A FUTURE AMOUNT JUST FELL. WHAT MUST HAVE CAUSED THIS A. THE DISCOUNT RATE JUST FELL. B. THE DISCOUNT RATE JUST ROSE. C. N (THE NUMBER OF TIME PERIODS) JUST FELL. D. THE FUTURE VALUE ROSE.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started