MULTIPLE CHOICE

1. The long-term asset that does not depreciate or amortize is:

A. leasehold improvement

B. furniture and fixtures

C. land improvement

D.land

2. When determining the rate ofreturnon assets:

A. return on assetsis the product of 3 "drivers" according to the DuPont model.

B. the DuPontmodel calculates the rate of return on assets as the net profit margin ratio times total asset turnover ratio.

C. total asset turnover measuers how much every sales dollar generates in profit.

D. it is important for companies to develop strategies to decrease total asset turnover.

3. The cash received when selling the investment in another company is reported on the statement of cash flows as a(n):

A. financing cash inflow

B. financing cash outflow

C. investing cash inflow

D. investing cash outflow

4. the future value of 1 will always be:

A. less than 1

B. equal to 1

C. greater than 1

D. equal to the interest rate

5. In present value calculations, the process of determining the present value of a single sum of money is called:

A. allocating

B. discounting

C. pricing

D. negotiating