Revenue minus expenses equals net worth.

True

False

10 points

QUESTION 3

Revenue minus expenses equals profitability.

True

False

10 points

QUESTION 4

Assets minus liabilities equals net worth.

True

False

10 points

QUESTION 5

Assets minus liabilities equals net income.

True

False

10 points

QUESTION 6

Revenue and expenses are reported on income statements.

True

False

10 points

QUESTION 7

Revenue and expenses are reported on balance sheets.

True

False

10 points

QUESTION 8

Assets and liabilities are reprted on balance sheets.

True

False

10 points

QUESTION 9

Cash flow from operating activities would include changes in inventory.

True

False

10 points

QUESTION 10

Return on assets equals profit margin times asset turnover.

True

False

10 points

QUESTION 11

Current assets plus current liabilities equals working capital.

True

False

10 points

QUESTION 12

Pro forma income statements are projected income statements.

True

False

10 points

QUESTION 13

Contribution margin equals price minus fixed costs per unit.

True

False

10 points

QUESTION 14

Break-even equals fixed costs plus contribution margin.

True

False

10 points

QUESTION 15

Degree of financial leverage equals EBIT divided by EPS.

True

False

10 points

QUESTION 16

Surplus cash should be invested in marketable securities.

True

False

10 points

QUESTION 17

Accounts receivable equals average daily credit sales divided by average collection period.

True

False

10 points

QUESTION 18

Trade credit is an important source of working capital.

True

False

10 points

QUESTION 19

IRR and NPV are TMV calculations.

True

False

10 points

QUESTION 20

IRR and NPV are CVP calculations.

True

False

10 points

QUESTION 21

TVM calculations are capital budgeting calculations.

True

False

10 points

QUESTION 22

D_{1 divided by} (P₀- F) plus g equals the present value of an annuity.

True

False

10 points

QUESTION 23

D₁divided by (P₀- F) plus g = Kn

True

False

10 points

QUESTION 24

Equity financing involves the sale of stock.

True

False

10 points

QUESTION 25

Equity financing involves the sale of bonds.

True

False

10 points

QUESTION 26

Debt financing involves the sale of bonds.

True

False

10 points

QUESTION 27

Rj + (Km - R_f) = K_mc

True

False

10 points

QUESTION 28

CAPM calucations determine the marginal cost of capital.

True

False

10 points

QUESTION 29

The NASDAQ is a money market.

True

False

10 points

QUESTION 30

Corporations pay dividends to stockholders as a return on investment.

True

False

10 points

QUESTION 31

Investment bankers underwrite IPOs

True

False

10 points

QUESTION 32

"Economics has little to do with finance" is a false statement.

True

False

10 points

QUESTION 33

"Accounting has a lot to do finance" is a false statement.

True

False

10 points

QUESTION 34

The SEC regulates the NYSE.

True

False

10 points

QUESTION 35

Financial securites are publically traded in secondary markets.

True

False

10 points

QUESTION 36

"GDP, interest rates, and inflation have little to do with financial decision making" is a true statement.

True

False

10 points

QUESTION 37

Corporations report retained earnings as cash on their balance sheets.

True

False

10 points

QUESTION 38

Corporations report retained earnings as revenue on their income statements.

True

False

10 points

QUESTION 39

Corporations report retained earnings as stockholders' equity on their balance sheets.

True

False

10 points

QUESTION 40

"The price of a corporation's stock is equal to its PE multiplied by its EPS" is a true statement.

True

False