QUESTION 1

1. Last year, McGinley Company had total equity of $600,000, a return on assets of 10%, and a return on equity of 15%. What was the amount of McGinley's total assets?

   	a.	$ 90,000
   	b.	$ 150,000
   	c.	$ 540,000
   	d.	$900,000

6 points

QUESTION 2

1. The additional cost of purchasing a new machine is an example of:

   	a.	A sunk cost.
   	b.	An opportunity cost.
   	c.	A fixed cost.
   	d.	An incremental cost.

3 points

QUESTION 3

1. Time value of money teaches us that we can only compare money flows if they:

   	a.	Have been adjusted for their time value.
   	b.	All take place at the same time.
   	c.	Are all the same amount.
   	d.	Do not earn any interest.

5 points

QUESTION 4

1. What is the fair value of a bond that pays $2,000 per year forever if the appropriate rate of return is 7%?

   	a.	$ 16,723
   	b.	$ 14,000
   	c.	$ 28,571
   	d.	$ 2,000

5 points

QUESTION 5

1. Comparing a number to some standard value or norm which is valid across many companies or industries is called a:

   	a.	Time-series comparison.
   	b.	Cross-sectional comparison.
   	c.	Benchmark comparison.
   	d.	Competitive benchmarking comparison.

3 points

QUESTION 6

1. Board meeting attendance is an example of a(n):

   	a.	Environmental ratio.
   	b.	Financial ratio.
   	c.	Social ratio.
   	d.	Governance ratio.