Archives: Quiz
Economics Chapter 10 1 Which The Following Statements Correct a When Calculating
CHAPTER 10: THE COST OF CAPITAL 1. “Capital” is sometimes defined as funds supplied to a firm by investors. a. True b. False ANSWER: True 2. The cost of capital used in capital budgeting should reflect the average cost of […]
Chapter 9 2 Which The Following Transactions Will Decrease
Topic Area: Ratio analysis-Accounts payable turnover 42. Which of the following transactions will decrease the accounts payable turnover ratio? A. Using cash to pay an accounts payable balance. B. Selling inventory on account. C. Selling inventory for cash. D. A […]
Economics Appendix N 1 Corporation Wants Determine The Effect Expansion Its
c Q 75,000 EBIT $4,000,000 DTL 2.00 Debt $15,000,000 Coupon rate 9.50% New DOL 1.600 Determine DFL: ANSWER: RATIONALE: DTL = DOL × DFL 2.00 = 1.60 × DFL DFL = 1.2500 Calculate interest from DFL equation Calculate dollar amount […]
Chapter 9 1 An employee has an obligation to pay his payroll taxes to
9-1 Chapter 09 Reporting and Interpreting Liabilities Answer Key True / False Questions 1. When a liability is initially recorded, it is recorded at the future amount of all payments. 2. FALSE A current liability is due within one year […]
Economics Appendix N 1 Comparing Mutually Exclusive Projects With Unequal Lives2
ANSWER: b RATIONALE: WACC 8.00% Project X CFs 0 1 2 3 4 –10,000 5,300 7,000 –10,000 5,300 7,000 –10,000 5,300 –3,000 5,300 7,000 NPV, Project X $1,687.91 Project Y CFs 0 1 2 3 4 –10,000 3,500 3,500 3,500 […]
Chapter 8 6 Benson Mining Company Purchased Site Containing
126. Benson Mining Company purchased a site containing a mineral deposit during 2016. The purchase price was $820,000, and the site is estimated to contain 400,000 tons of extractable ore. Benson constructed a building at the site, at a cost […]
Economics Appendix N 1 The Firm Considering Anew Independent Project That
c wA 50.00% wB 50.00% rRF 5.00% RPM 6.00% bA 0.8 bB 1.5 ANSWER: RATIONALE: Calculate the cost of capital for Division A: rA = rRF + RPM × bA rA = 5.00% + 6.00% × 0.8 rA = 9.80% […]
Chapter 8 5 Covey Company Purchased Machine January 2016
116. On January 1, 2015, Boston Company purchased a heavy duty machine having an invoice price of $13,000. Boston paid transportation and installation costs totaling $3,000. The machine is estimated to have a 4-year useful life and a $1,400 residual […]
Economics Appendix N 1 None The Statements Correct answer A 2015 Cengage
ANSWER: d © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ANSWER: a WEB APPENDIX 12C: USING THE CAPM TO ESTIMATE THE RISK […]
Chapter 8 4 Which The Following Most Likely Intangible
92. During 2016, a company purchased a mine at a cost of $3,000,000. The company spent an additional $600,000 getting the mine ready for its intended use. It is estimated that 300,000 tons of mineral can be removed from the […]
Economics Appendix N 1 Coefficients6 Given The Following Returns Stock And
Year Stock J Market 1 −13.85% −8.63% 2 22.90% 12.37% 3 35.15% 19.37% Year Stock X Market 1 12.00% 14.00% 2 5.00% 2.00% 3 11.00% 14.00% 4 −7.00% −3.00% ANSWER: b ANSWER: c RATIONALE: Rise/Run using Yr. 1 & Yr. […]
Chapter 8 3 January 2016 Wasson Company Purchased Delivery
69. Schager Company purchased a computer system on January 1, 2016, at a cash cost of $25,000. The estimated useful life is 10 years, and the estimated residual value is $3,000. The company will use the double declining-balance depreciation method. […]
Economics Appendix N 1 The Basic Doctrine Fairness States That All
ANSWER: d © 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ANSWER: e WEB APPENDIX 7C: BANKRUPTCY AND REORGANIZATION 1. Chapter 7 of […]
Chapter 8 2 March Wright Company Purchased New Equipment
40. Which statement is false? AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 3 Hard Learning Objective: 08-01 Define, classify, and explain the nature of long-lived productive assets and interpret the fixed […]
Economics Appendix N 1 Quarterly Payment Bonds Calculate Nominal And Effective
ANSWER: a RATIONALE: The 10-year bond has payments that come sooner than the zero coupon bond’s payments. Therefore, some of the 10-year bond’s cash flows will be discounted for fewer periods and will lose less of their value. Therefore, the […]
Chapter 8 1 The land cost initially reported on the balance sheet may include legal
Chapter 08 Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources Answer Key True / False Questions 1. Tangible long-lived productive assets differ from intangible long-lived productive assets in that tangible assets have physical substance whereas intangible assets […]
Economics Appendix N 1 In order to achieve your goal, what nominal interest rate
N 6 FV $100,000 ANSWER: b RATIONALE: i 9.00% i × N 0.5400 PV = FV/(ein) PV = $58,274.83 ANSWER: b RATIONALE: N 20 PV = $15,000.00 i 5.00% i × N 1.0000 FV = PV(ein) FV = $40,774.23 WEB […]
Chapter 7 6 Rio Company Uses The Fifo Inventory
AACSB: Knowledge Application AICPA: BB Critical Thinking AICPA: FN Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 07-02 Report inventory and cost of goods sold using the four inventory costing methods. Topic Area: Inventory methods-FIFO Topic Area: Inventory methods-LIFO 126. […]
Economics Chapter 9 2 Stocks And Their Valuation 78 Based The Corporate
Chapter 9: Stocks and Their Valuation 59. Mooradian Corporation’s free cash flow during the just-ended year (t = 0) was $150 million, and its FCF is expected to grow at a constant rate of 5.0% in the future. If the […]
Chapter 7 5 William Company Uses The Periodic Inventory
AACSB: Knowledge Application AICPA: BB Critical Thinking AICPA: FN Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 07-01 Apply the cost principle to identify the amounts that should be included in inventory and the expense matching principle to determine cost […]
Economics Chapter 9 1 When a new issue of stock is brought to market
CHAPTER 9: STOCKS AND THEIR VALUATION 1. A proxy is a document giving one party the authority to act for another party, including the power to vote shares of common stock. Proxies can be important tools relating to control of […]
Chapter 7 4 Which The Following Journal Entries Not
88. On March 15, 2016, Ryan Company purchased $10,000 of merchandise on credit subject to terms of 2/10, n/30. Ryan Company records its purchases using the gross amount. The periodic inventory system is used. Which of the following journal entries […]
Economics Chapter 8 3 both banks have had less variability than most other
Chapter 8: Risk and Rates of Return 128. Mike Flannery holds the following portfolio: Stock Investment Beta A $150,000 1.40 B 50,000 0.80 C 100,000 1.00 D 75,000 1.20 Total $375,000 What is the portfolio’s beta? a. 1.06 b. 1.17 […]
Chapter 20 5 Walt Disney And American Airlines Merged
88. If Walt Disney and American Airlines merged, it would be an example of a: AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 20-01 Differentiate among types of and address motives for mergers and acquisitions. Topic: […]
Chapter 7 3 The Inventory Turnover Reflects How Many
65. The inventory turnover AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 2 Medium Learning Objective: 07-05 Evaluate inventory management using the inventory turnover ratio. Topic Area: Ratio analysis-Inventory turnover A. reflects […]
Economics Chapter 8 2 Risk And Rates Return108 Which The Following
Chapter 8: Risk and Rates of Return 91. Assume that the risk-free rate is 6% and the market risk premium is 5%. Given this information, which of the following statements is CORRECT? a. An index fund with beta = 1.0 […]
Chapter 20 4 Calculating The Probability Bankruptcy Linear Probability
66. Calculating the Probability of Bankruptcy A linear probability model you have developed finds there are two factors influencing the past bankruptcy behavior of firms: the debt–to– equity ratio and the profit margin. Based on past bankruptcy experience, the linear […]
Chapter 7 2 Which The Following Costs Will Not
39. Which of the following costs will not affect cost of goods sold? 40. Which of the following would not be a component of the year-end inventory balance? A. Freight-in costs. B. Inventory inspection costs. C. Inventory preparation costs. D. […]
Economics Chapter 8 1 Which The Following Statements Correct Stocks Beta
Chapter 8: Risk and Rates of Return 1. The tighter the probability distribution of its expected future returns, the greater the risk of a given investment as measured by its standard deviation. a. True b. False ANSWER: False 2. The […]
Chapter 20 3 Valuation Merger Department Stores Inc Asking
51. Valuation of a Merger Windows N Such, Inc., is asking a price of $195 million to be purchased by Curtain Rods Corp. The two firms currently have cumulative total cash flows of $15 million which are growing at 1 […]
Chapter 7 1 Apply the cost principle to identify the amounts that should be
Chapter 07 Reporting and Interpreting Cost of Goods Sold and Inventory Answer Key True / False Questions 1. The use of raw materials in the manufacturing process is reported as an operating expense on the income statement. 2. TRUE Items […]
Economics Chapter 7 2 Bonds And Their Valuation75 Morin Companys Bonds
Chapter 7: Bonds and Their Valuation 66. Which of the following statements is CORRECT? a. The total return on a bond during a given year is based only on the coupon interest payments received. b. All else equal, a bond […]
Chapter 20 2 Calculation Altmans Score Suppose That The
32. Calculation of Altman’s Z -Score: Suppose that the financial ratios of a potential borrowing firm took the following values: X1 = Net working capital/Total assets = 0.35, X2 = Retained earnings/Total assets = 0.50, X3 = Earnings before interest […]
Chapter 6 6 Comparison The Balance Cottonwood Companys Cash
Interest revenue 100 AACSB: Knowledge Application AICPA: BB Critical Thinking AICPA: FN Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 06-04 Report, control, and safeguard cash. Topic Area: Cash-Bank reconciliation 122. Chicago Company has hired you to reconcile its bank […]
Economics Chapter 7 1 Bond Will Increase Over Timed The Prices
Chapter 7: Bonds and Their Valuation 1. If a firm raises capital by selling new bonds, it could be called the “issuing firm,” and the coupon rate is generally set equal to the required rate on bonds of equal risk. […]
Chapter 20 1 Which The Following Defined Transaction Which Two
Chapter 20 Mergers and Acquisitions and Financial Distress Answer Key Multiple Choice Questions 1. Which of the following is defined as a transaction in which two firms combine to form a single firm? AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: […]
Chapter 6 5 Average Collection Period Interpret The Receivables Turnover
109. Indicate whether each of the accounts listed below normally will have a debit balance or a credit balance. Record your answer to the left of each account by entering either Dr or Cr. ____ 1. Allowance for doubtful accounts […]
Economics Chapter 6 2 May not be scanned, copied or duplicated, or posted to a publicly
Chapter 6: Interest Rates 55. Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 3.20% per year. What is the real risk-free rate of return, r*? Disregard any cross-product terms, i.e., if […]
Chapter 19 5 The Spot Rate Between The Us
108. Over the past decade, China has acquired hundreds of billions of U.S. dollars due to the trade imbalance between the two countries. The Chinese government has used many of these dollars to purchase Treasury bonds. What would be the […]
Chapter 6 4 Which The Following Correctly Describes The
87. Which of the following correctly describes the following journal entry? Cash xxx Sales discounts xxx Accounts receivable xxx AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 2 Medium Learning Objective: 06-(S): […]
Economics Chapter 6 1 Treasury Yield Curve Will Have Upward Slope
Chapter 6: Interest Rates The difficulty of these questions as seen by students will depend on (1) what was discussed in class and (2) how long students have to answer the questions. If time is not an issue, then many […]
Chapter 19 4 The Us Dollar Spot Exchange Rate
88. A. $0.03 million B. $0.15 million C. $0.24 million D. $0.32 million If the cash flows are received today, they would be: 20 million pesos × ($1 ÷ 11.792 pesos) + 35 million rupees × ($1 ÷ 49.204 rupees) […]
Chapter 6 3 Company Purchased Goods Credit With Credit
60. A company purchased goods on credit with credit terms of 3/15, n/45. Although the company does not have cash available to pay within the discount period, the manager of the company is considering borrowing money to take advantage of […]
Economics Chapter 5 4 Steve Provided For His Old Age until Now
Chapter 5: The Value of Money 151. Your child’s orthodontist offers you two alternative payment plans. The first plan requires a $4,000 immediate up- front payment. The second plan requires you to make monthly payments of $137.41, payable at the […]
Chapter 19 3 Rupees These Cash Flows Are Not
64. Purchasing Power Parity If the current spot rate between the U.S. dollar and the Netherland Antilles guilder was $1 = 1.54 guilder, and if the inflation rate in the United States was 2 percent and in the Netherland Antilles […]
Chapter 6 2 Flyer Company Has Provided The Following
36. Flyer Company has provided the following information prior to any year–end bad debt adjustment: • Cash sales, $150,000 • Credit sales, $450,000 • Selling and administrative expenses, $110,000 • Sales returns and allowances, $30,000 • Gross profit, $490,000 • […]
Economics Chapter 5 3 Annual Effective Rate 824 Vs Nominal Rate
Chapter 5: The Value of Money 127. You sold a car and accepted a note with the following cash flow stream as your payment. What was the effective price you received for the car assuming an interest rate of 6.0%? […]
Chapter 19 2 Currency Exchange Compute The Amount Foreign
38. Currency Exchange Compute the amount of foreign currency that can be purchased for $400,000: 1 Indian rupee = $0.02250 AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 1 Easy Learning Objective: 19-03 Compute currency exchanges. Topic: Currency Exchange 39. […]
Chapter 6 1 Mediumlearning Objective 0603 Analyze And Interpret The
Chapter 06 Reporting and Interpreting Sales Revenue, Receivables, and Cash Answer Key True / False Questions 1. When goods are shipped FOB shipping point, title passes to the buyer on the shipment date. 2. FALSE When goods are shipped FOB […]
Economics Chapter 5 2 You Could Earn 55 Your Money Other Investments
Chapter 5: The Value of Money 74. You deposit $1,000 today in a savings account that pays 3.5% interest, compounded annually. How much will your account be worth at the end of 25 years? a. $2,245.08 b. $2,363.24 c. $2,481.41 […]