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1. At December 31, 2012, Able Corp. reported a retained earnings balance on its balance sheet of $10,000,000. At December 31, 2012, Baker Corp. reported a retained carnings balance on its balance sheet of $15,000,000. Given this information, which of the following statements is necessarily true? a) Baker had higher net income for 2012 than Able. b) Baker has more cash at December 31, 2012, than Able. e) Baker has earned more net income since its inception than Able. d) No conclusions can be reached on which company has more cash or more cumulative net income without more information. 2. The quick ratio of a firm would equal its current ratio whenever: a) The firm has negative liquidity. b) The firm has zero debt. c) The firm has zero inventory. d) The ratios are calculated in such a way that they can never be equal. 3. Which of the following conclusions would be true if the rate of return on your investments increased? a) The present value for any lump sum you would receive in the future would increase. b) The present value for any sum you would receive in the future would decrease. c) Your rate of return would not have any effect on the present value of any sum to be received in the future. d) The present value of any annuity you would receive in the future would increase 4. Under Armour is considering a new inventory system that will cost $80,000. The system is expected to generate positive cash flows over the next four years in the amounts of $30,000 in year one, S40,000 in year two, $50,000 in year three, and $10,000 in year four. Under Armour's required rate of return is 8%. What is the net present value of this project to the nearest ten dollars? a) $930 b) $29,100 c) $109,100 d)-$18,900