Multiple cholce Guestions (4 points each) 1. Net Working Capital of Fened inc, has improved. This is most likely the result of A) Sort torm debt went up. B) Accrued expenses increased. C) Fixed assets have depreclated. D) Accounts Payable went down. 2. Company A and Company B have the same retention ratio. Sustainable Growth Rate of Company A is higher than that of Company B. Then: A) A and B cannot have the same dividend payout ratios. B) Internal Growth Rate of Company B is higher than that of Company A if both companies have zero Debt. C) ROE of A is greater than ROE of B. D) A,B, and C E) A and C 3. Valuation of a company using the Balance Sheet values may be misleading because A) assets are recorded at market value rather than at cost. B) intangible assets are recorded in Balance Sheet as part of Fixed Assets. C) capital Structure of the company cannot be observed in Balance Sheet. D) unrealized value such as future growth potential is not a part of Balance Sheet. E) none of the above. 4. Which of the following is about the "effective rate"? 3) As the frequency of compounding is increasing the effective rate increases at an increasing to igh number ) As the compounding frequency is increasing, the effective rate converges compounding, their finily). If two investors get the same effective annual rate from same frequency of compounding, their tial investment must be the same None of the above