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