Fin 534 week 3 quiz 2
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Fin 534 week 3 quiz 2

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Fin 534 week 3 quiz 2 Fin 534 week 3 quiz 2 Document Transcript

  • FIN 534 Week 3 Quiz 2 PLEASE DOWNLOAD HEREFIN 534 quiz 2 week 3 (30 questions with answers)Question 1Which of the following statements is CORRECT?Question 2Which of the following statements is CORRECT?Question 3For managerial purposes, i.e., making decisions regarding the firms operations,the standard financial statements as prepared by accountants under GenerallyAccepted Accounting Principles (GAAP) are often modified and used to createalternative data and metrics that provide a somewhat different picture of a firmsoperations. Related to these modifications, which of the following statements isCORRECT?Question 4On its 2010 balance sheet, Barngrover Books showed $510 million of retainedearnings, and exactly that same amount was shown the following year. Assuming that no earnings restatements were issued, which of the followingstatements is CORRECT?Question 5Other things held constant, which of the following actions would increase theamount of cash on a company’s balance sheet?Question 6The CFO of Shalit Industries plans to have the company issue $300 million ofnew common stock and use the proceeds to pay off some of its outstandingbonds. Assume that the company, which does not pay any dividends, takes thisaction, and that total assets, operating income (EBIT), and its tax rate all remainconstant. Which of the following would occur?Question 7
  • Which of the following factors could explain why Dellva Energy had a negative netcash flow last year, even though the cash on its balance sheet increased?Question 8Which of the following statements is CORRECT?Question 9Below is the common equity section (in millions) of Teweles Technology’s last twoyear-end balance sheets:2009 2008Common stock $2,000 $1,000Retained earnings 2,000 2,340Total common equity $4,000 $3,340Teweles has never paid a dividend to its common stockholders. Which of thefollowing statements is CORRECT?Assume that Congress recently passed a provision that will enable BevsBeverages Inc. (BBI) to double its depreciation expense for the upcoming yearbut will have no effect on its sales revenue or tax rate. Prior to the new provision,BBI’s net income after taxes was forecasted to be $4 million. Which of thefollowing best describes the impact of the new provision on BBI’s financialstatements versus the statements without the provision? Assume that thecompany uses the same depreciation method for tax and stockholder reportingpurposes.Question 11A start-up firm is making an initial investment in new plant and equipment.Assume that currently its equipment must be depreciated on a straight-line basisover 10 years, but Congress is considering legislation that would require the firmto depreciate the equipment over 7 years. If the legislation becomes law, which ofthe following would occur in the year following the change?Question 12Which of the following statements is CORRECT?Question 13Which of the following statements is CORRECT?
  • Question 14Which of the following statements is CORRECT?Question 15Which of the following items is NOT included in current assets?Question 16A firm’s new president wants to strengthen the company’s financial position.Which of the following actions would make it financially stronger?Question 17Which of the following statements is CORRECT?Question 18Which of the following statements is CORRECT?Question 19Which of the following statements is CORRECT?Question 20Taggart Technologies is considering issuing new common stock and using theproceeds to reduce its outstanding debt. The stock issue would have no effect ontotal assets, the interest rate Taggart pays, EBIT, or the tax rate. Which of thefollowing is likely to occur if the company goes ahead with the stock issue?Question 21Casey Communications recently issued new common stock and used theproceeds to pay off some of its short-term notes payable. This action had noeffect on the company’s total assets or operating income. Which of the followingeffects would occur as a result of this action?Question 22Which of the following statements is CORRECT?Question 23Companies HD and LD have the same sales, tax rate, interest rate on their debt,total assets, and basic earning power. Both companies have positive net
  • incomes. Company HD has a higher debt ratio and, therefore, a higher interestexpense. Which of the following statements is CORRECT?Question 24You observe that a firm’s ROE is above the industry average, but its profit marginand debt ratio are both below the industry average. Which of the followingstatements is CORRECT?Question 25Which of the following would indicate an improvement in a company’s financialposition, holding other things constant?Question 26A firm wants to strengthen its financial position. Which of the following actionswould increase its quick ratio?Question 27If a bank loan officer were considering a company’s request for a loan, which ofthe following statements would you consider to be CORRECT?Question 28Companies HD and LD are both profitable, and they have the same total assets(TA), Sales (S), return on assets (ROA), and profit margin (PM). However,Company HD has the higher debt ratio. Which of the following statements isCORRECT?Question 29Which of the following statements is CORRECT?Question 30Considered alone, which of the following would increase a company’s currentratio?