Finance Final Non Math
The effective annual rate:
indicates the total amount of interest that will be earned at the end of one year
Which of the following organization forms for a business does not avoid double taxation?
"C" Corporation
Which of the following organization forms has the most revenue?
"C" Corporation
U.S. public companies are required to file their annual financial statements with the U.S. Securities and Exchange Commission on which form?
10-K
Which of the following statements regarding limited partnerships is true?
A limited partner's liability is limited by the amount of their investment.
If Moon corporation has an increase in sales, which of the following would result in no change in its EBIT margin?
A proportional increase in its EBIT
Which of the following adjustments is not correct if you are trying to calculate cash flow from financing activities?
Add dividends paid.
Which of the following adjustments to net income is not correct if you are trying to calculate cash flow from operating activities?
Add increases in accounts receivable
Which of the following is / are an advantage of incorporation?
All the above -access to capital markets -limited liability -unlimited life
The Principal-Agent Problem arises
Both A and B -because managers have little incentive to work in the interest of shareholders when this means working against their own self-interest -because of the separation of ownership and control in a corporation
If you buy shares of Coca-Cola on the primary market:
Coca-Cola receives the money because the company has issued new shares
Cash is a
Current Asset
Accounts Payable is a
Current Liability
Which of the following statements is false?
Fundamentally, interest rates are determined by the Federal Reserve
Which of the following statements is false?
If the corporation fails to satisfy debt holders' claims, debt holders may lose control of the firm.
Which of the following is not an operating expense?
Interest Expense
If Moon's corporation's gross margin declined, which of the following is true?
Its cost of goods sold as a percent of sales increased.
Which of the following is NOT an advantage of a sole proprietorship?
Limited Liability
A 30 year mortgage loan is a
Long-Term Liability
Which of the following statements regarding net income transferred to retained earnings is correct?
Net income = net income transferred to retained earnings + dividends
Which of the following statements is false?
Real interest rates indicate the rate at which your money will grow if invested for a certain period?
Which of the following is not a financial statement that every public company is required to produce?
Statement of Sources and Uses of Cash
Suppose Novak Company experienced a reduction in its ROE over the last year. This fall could be attributed to
a decrease in Asset Turnover
You overhear your manager saying that she plans to book an Ocean-view room on her upcoming trip to Miami for a meeting. You know that the interior rooms are much less expensive, but that your manager is traveling at the Company's expense. This use of additional funds comes about as a result of:
an agency problem
If Alex Corporation takes out a bank loan to purchase a machine used in production and everything else stays the same, its equity multiplier will ____________ and its ROE will ____________
increase; increase
The inventory days ratio measures
the average length of time it takes a company to sells its inventory
The firm's equity multiplier measures
the value of assets held per dollar of shareholder equity
Which of the following statements is false?
QUIZ 1 QUESTION 6
