Which branch ofeconomics does accounting fall under? Select one: O a. labor economics O b. resource economics C. information economics A firm has assets on its balance sheet of $330 and expected cash flows next year of $150. If using accounting under ideal conditions, how much income is recognized for the upcoming year if the discount rate is 9%? Select one: O a. $13.50 O b. $29.70 O c. $150 How does fair value accounting differ from value in use accounting? Select one: Fair value accounting measures the discounted present value of cash flows O b. Fair value accounting uses accruals to match expenses and revenues O c. Fair value accounting measures the exit price should a firm sell an asset If the stock market is efficient what conclusion can be drawn about amortization and depreciation? Select one: O a. chosen method doesn't matter as long as it doesn't affect cash flows O b. straight line deprecation should be used ) C. insiders will be able to trade on this information and make money Holding the market portfolio allows investors to get which of the following? Select one: O a. maximize their return O b. maximize their holding period O c. maximize their return vs. risk ratio What is a reasonable conclusion to -be drawn if there is information asymmetry in financial reporting? Select one: O a. stock markets will not reflect the information assymetries O b. financial statements cannot be trusted O c. accountants should find ways to eliminate the information asymmetries Which of the following is NOT a criticism of historical cost accounting? Select one: O a. The income statement is redundant because all of the information that an investor needs is found on the balance sheet O b. It allows for different methods to account for the same transactions O C. It does not account for internally generated good will properly Present Value accounting applied to Oil and Gas firms is known as which of the following? Select one: O a. RRA O b. Embedded Value O c. ERA If a firm has cash flows of $250 for the next 2 years and then ceases to exist, what is the value of the firm with a discount rate of 8% and no debt? Select one: O a. $445.82 O b. $500.00 O c. $428.67 What is the stewardship role of financial reporting? Select one: O a. alignment of manager and shareholder interests O b. reducing adverse selection O c. reducing information asymmetries Holding the market portfolio allows investors to get which of the following? Select one: O a. maximize their return vs. risk ratio O b. maximize their holding period return O c. maximize their return Competition in financial markets will result in which of the following? Select one: O a. alpha < zero O b. alpha > zero O C. alpha = zero If you observe a linear utility function, what type of investor does this represent? Select one: O a. risk seeking b. risk averse C. risk neutral