The repurchase of outstanding stock by a corporation causes ________ for the firm, all else constant.

A.An immediate cash inflow

B.A decrease in the cash flow to stockholders

C.A decrease in both earnings per share and dividends per share

D.Both a cash outflow and an increase in earnings per share

44.A firm has a calendar tax year. On January 10, the firm purchased depreciable equipment for cash. This purchase will create:

A.A current cash outflow and a lesser decrease in current net income.

B.A decrease in net income by an amount equal to the decrease in net assets.

C.No change in net income for the current year.

D.An increase in the total taxes of the firm over a period of years.

45.Which one of the following will increase the operating cash flow of a firm, all else constant?

A.An increase in the taxes paid

B.A decrease in sales

C.A decrease in the interest expense

D.An increase in depreciation expense

46.Which one of the following will increase earnings per share, all else held constant?

A.An increase in wages paid to employees.

B.A decrease in sales of the firm.

C.An increase in marginal tax rates.

D.A decrease in the number of shares outstanding.

47.A liquid asset is defined as an asset which:

A.Can be quickly converted into cash without significant loss in value.

B.A firm expects to own for a period of ten years or more.

C.Has no physical presence, such as a patent.

D.A firm purchased with cash within the last year.

48.Which of the following statements concerning a statement of financial position is (are) correct?

A.Assets equal liabilities minus shareholders' equity.

B.A patent is an example of an intangible asset.

C.Retained earnings is classified as long-term debt.

D.The statement is also known as a profit and loss statement.

49.Which of the following assets is the most liquid?

A.An office building

B.An electric saw for sale by a hardware store

C.A patent on a new kitchen appliance

D.An amount receivable from a customer for a service provided

50.Which of the following will cause net income to decrease for the following year?

A.An increase in the amount of dividends paid per share.

B.A reduction in tax rates.

C.An increase in profit margins.

D.The accumulation of more long-term debt by a firm.

51.Which one of the following will decrease net working capital?

A.An increase in accounts payable.

B.A sale of a fixed asset for cash.

C.A sale of inventory at a profit.

D.A decrease in accounts payable.

52.Which one of the following will increase shareholders' equity, all else held constant?

A.A purchase of equipment on account.

B.A sale of inventory at a profit.

C.A payment on a loan.

D.The declaration of a stock dividend.

53.Jeminson'sHardware has accounts payable of $682, inventory of $3,608, cash of $340, fixed assets of $4,211, accounts receivable of $418, and long-term debt of $3,750. What is the value of the net working capital to total assets ratio?

A..29

B..43

C..47

D..56

54.A Vancouver firm has a debt-equity ratio of .56. What is the total debt ratio?

A..36

B..44

C.1.44

D.1.56

55.A Vancouver firm has sales of $1,640, net income of $135, net fixed assets of $1,200, and current assets of $530. The firm has $280 in inventory. What is the common-size statement value of inventory?

A.15.01 %

B.16.18 %

C.30.42 %

D.52.83 %

56.Katrina's Fury has $697,400 in sales. The profit margin is 3.4 % and the firm has 12,500 shares of stock outstanding. The market price per share is $33. What is the price-earnings ratio?

A.15.8

B.16.2

C.16.6

D.17.4

57.Patti's Pizza has net income of $218,490, a price-earnings ratio of 14.6, and earnings per share of $1.32. How many shares of stock are outstanding?

A.14,965

B.165,523

C.171,000

D.173,407

58.QwikStop has accounts receivable of $4,830, inventory of $9,083, sales of $38,600, and cost of goods sold of $21,400. How many days does it take the firm to both sell their inventory and collect the payment on the sale?

A.186 days

B.201 days

C.214 days

D.217 days

59.A Kingston firm has sales of $49,800, costs of $36,100, interest paid of $380, and depreciation of $3,200. The tax rate is 35 %. What is the value of the cash coverage ratio?

A.25.73

B.30.00

C.36.05

D.41.08

60.Which of the following regarding financial statement analysis is NOT correct?

A.It is straightforward to calculate the market value based measures of firm performance using financial statements prepared according to GAAP.

B.Asset management ratios measure the intensity and efficiency of asset use.

C.For common size statements, we divide asset and liability accounts by total assets and statement of comprehensive income accounts by sales.

D.An increase in a firm's net fixed assets is considered to be a use of cash.

61.The interval measure is an example ofa(n)____________ ratio.

A.Financial leverage.

B.Asset management.

C.Profitability.

D.Short-term solvency.

62.On a common-size statement of financial position, all _____ accounts are shown as a percentage of _____.

A.Income; total assets.

B.Liability; net income.

C.Liability; total assets.

D.Equity; sales.

63.Which of the following is NOT a correct statement about the price/earnings ratio?

A.A high P/E ratio is often taken to mean the firm has significant prospects for future growth.

B.A P/E ratio of 15 means investors are willing to pay $15 for each $1 of current earnings.

C.Care must be taken in interpreting very high P/E ratios since they can result from a firm having very low earnings.

D.A firm with high earnings per share will also have a very high P/E ratio.

64.Activities of the firm in which cash is spent are known as:

A.Uses of cash.

B.Cash payments.

C.Cash receipts.

D.Cash on hand.

16.The effective annual rate on your savings account assumes that:

A.You withdraw the interest as soon as it is earned.

B.All interest is withdrawn from the account at the end of each year.

C.The annual percentage rate varies as the prime rate varies.

D.All interest payments are reinvested at the same rate as the original deposit into the account.

20.You are trying to use your financial calculator to solve a present value problem that has unequal cash flows. You input monies you receive as positive values. Which one of the following statements is true?

A.Cash outflows should be input as positive values for each year in which they occur.

B.Any cash flow occurring today should be input as a Year 1 cash flow.

C.You have annual cash flows starting with Year 1 of $100, $0, $200, and $300. The $300 cash flow should be input as occurring in year 3.

D.A negative present value indicates that this series of cash flows causes you to lose money today given a certain discount rate.

32.The difference between an annuity and a perpetuity is the:

A.Range of applicable discount rates.

B.Number of time periods.

C.Fluctuating value of the cash flows.

D.Infrequency of the cash flows.

33.You are considering two loan offers. All else equal, you should accept the loan:

A.Withthe least frequent compounding period.

B.With the most frequent compounding period.

C.With the lowest effective annual rate.

D.With the lowest stated interest rate.

40.Which one of the following is true concerning amortized loans?

A.Amortized loans all have a balloon payment at the end of the loan term.

B.Amortized loan payments consist of interest only.

C.An amortized loan requires only one lump sum payment at the end of the loan term.

D.A loan where annual payments include the interest due plus some set amount of principal is an amortized loan.