TRUE/FALSE 1. Generally, in most cases, owning stocks gives you the right to vote on important company issues and policies.

2. Factoring is selling accounts payable or accounts receivable for cash.

3. The terms: net earnings, net profit, net income, and the bottom line are all similar in meaning.

4. GAAP stands for Generally Archaic Accounting Principles.

5. If you buy stock in a corporation, you are considered a shareholder or a stockholder of that corporation.

6. The current ratio is defined as assets divided by liabilities.

7. Lower rates of interest are associated with greater present values.

8. Unlike stockholders who have equity in, and are part owners of a company, bondholders are more like creditors.

9. Net present value is simply present value minus the initial cost outlay of the project or investment.

10. When comparing two investments, you should always calculate the future value of each investment and then compare the investment with the highest future value.

11. The present value of a dollar

1. increases with lower interest rates

2. increases with higher interest rates

3. increases with longer periods of time

4. decreases with longer periods of time a. 1 and 4 b. 1 and 3 c. 2 and 3 d. 2 and 4

12. The future value of a dollar 1. increases with lower interest rates 2. increases with higher interest rates 3. increases with longer periods of time 4. decreases with longer periods of time a. 1 and 3 b. 2 and 3 c. 1 and 4 d. 2 and 4

13. Liabilities equal a. assets minus equity b. equity c. equity minus assets d. assets e. a group that meets at Diamond Bar

14. A firm does not obtain financial leverage by a. issuing debt b. leasing c. issuing preferred stock d. issuing common stock

15. A high current ratio suggests that the firm a. has a small amount of long-term debt b. is carrying little inventory c. is able to meet its current obligations d. is profitable e. a firm's electrical system is strong