Multiple Choice:

1- The following statement is true about a company's income statement:

Select one:

a. Net Earnings is also known as a company's gross profits

b. Selling, General, and Administrative Expenses include income taxes paid

c. Operating profit indicates a company's earnings from all of its operations

d. Operating profit indicates a company's earnings from its normal and recurring operations

2- Buffett believes that companies with low research and development expenses:

Select one:

a. Put their long-term economics at risk

b. Will need to continually update their sales programs

c. Are more likely to have a competitive advantage

d. Are probably in highly competitive industries