Quesun completon Status: QUESTION 1 The higher the degree of financial leverage employed by a firm is, the: A. Higher is the probability that the firm will encounter financial distress B. Lower is the amount of debt incurred. C. Less debt a firm has per dollar of total assets D. Lower is the balance in accounts payable E. Higher is the number of outstanding shares of stock QUESTION 2 Which one of the following statements concerning net working capital is correct? A. An increase in net working capital must also increase current assets B. Net working capital increases when inventory is sold for cash at a profit. C. Net working capital is a part of the operating cash flow. D. Firms with equal amounts of net working capital are also equally liquid. E. The lower the value of net working capital is, the greater is the ability of a firm to meet its current obligations QUESTION 3 Which one of the following represents the most liquid asset? A. $100 of inventory which is discounted and sold for $97 cash today. B. $100 accounts receivable that will be collected in full next week. C. $100 account receivable that is discounted and collected for 596 today. D. 5100 of inventory which is sold today on credit for $103. E. $100 of inventory that is sold today for $100 cash. QUESTION 7 Which one of the following is included in a firm's market value but is excluded from the firm's accounting value/book value? A The food reputation of a company B. E ment owned by the firm Money de from a customer D. Anem held by the form for future sale Real estate investment QUESTIONS The Day News had net income of $121,600 of which 40 percent was distributed to the shareholders as dividends. During the year, the company sold $75,000 worth of common stock What is the cash flow to stockholders? A-526,360 B. $2,040 C. $123.640 D. 5147.960 ..575.000 QUESTION Hungry Lunch has not income of $68,710, a price carings ratio of 137, and earnings per share of $ 24. How many shwes of stock are outstanding A .8.20,897 171.000 0.206292 105745 QUESTION 4 will cause the cash flow from assets to increase For a tax paying firm, an increase in A Change in networking capital B. Depreciation Taxes D. Net capital spending L. Production costs QUESTIONS Reliable Cars has sales of $807 200, total assets of $1,105, 100, and a profit margin of 9.68 percent. The firm has a total debt ratio of 64 percent. What is the return on equity A 1309 percent 18 56 percent C 2103 percent 019 64 percent E. 1604 percent QUESTION 6 decrease if a firm can decrease its operating costs a re constant Which one of the following w on Prott margin C. Return on assets D. Return on equity Price earnings ratio QUESTION 10 As of 2015, which one of the following statements concerning corporate income taxes is correct? A. The lowest marginal rate is 25 percent B. A firm's tax is computed on an incremental basis When analyzing a new project, the average tax rate should be used D. The largest corporations have an average tax rate of 39 percent E. A firm's marginal tax rate will generally be lower than its average tax rate once the firm's income exceeds $50,000 QUESTION 11 A firm has total debt of $4,850 and a debt-equity ratio of 57. What is the value of the total assets? A S11,034.00 B. 513,358 77 C7253.40 D. 56,128.05 E. $9.571.95
