Which of the following is TRUE about shareholder wealth maximization model (SWM)? I. The continental European and Japanese equity markets are characterized by the SWM model. II. According to the SWM model, managers mainly act in the interest of shareholders. I and II Ne the r I nor II II onk I onk Question 10 An increase in current liabilities will have which one of the following effects, all else held constant? Assume all ratios have positive values. Increase In the current ratio Decreace In the qukk ratio Increace In the net worklng capltal to total asets ratio Question 11 Financial planning includes the: I. Determination of asset requirements II. Development of contingency plans Ne the I I nor II II onky An example of a capital budgeting decision is Whether or not to buy more current asets How many shares of stock to ksue How to refinance a debt ksue that k maturlng How much Inventory to keep on hand Long term Investments such as new machlnery Question 13 One disadvantage of the corporate form of business ownership is the: firm's abllty to ksue additional shares of stock firm's potential for an unllmited llfe. double taxation of dktrlbuted profits. llmited labillty of lts share holders for the firm's debts. Question 14 According to generally accepted accounting principles (GA.A.P), which of the following statements is TRUE? Costs of goods sold are recorded based on the recognition prlnclple. Depreclation k recorded based on the recognition princlple. Income b recorded based on the realtation princlple. Costs are recorded based on the realtation princlple. Depreclation k recorded based on the market value princlple. Which one of the following best illustrates that the management of a firm is adhering to the gool of financial management? An Increase In the number of shares outstanding Adecrease In the per unit production costs Adecrease In the net working capltal An Increace In the market value per share An Increase In the amount of the quarte rly dwbend Question 16 Which the following is an agency cost? I. Investing a new project that creates firm value II. Hiring outside accountants to audit the company's financial statements I and II II only Nelther I nor II I onk Question 17 The OCF (operating cash flow) calculated in finance is than that from accounting principles because in finance we consider interest payment larger; financlng expense larger; operating expense smalk r; ope rating expense smalk r; financlng expense