1. Question 10Question 10
2. Question 11Question 11
3. Question 12Question 12
4. Question 13Question 13
5. Question 14Question 14
6. Question 15Question 15
7. Question 16Question 16
8. Question 17Question 17
9. Question 18Question 18
10. Question 19Question 19
11. Question 20Question 20

1. 4 Points

Company ABC has a market capitalization of $750 million, Book Value (Shareholder's Equity) Per share of $15 and net income of $25 million. If the stock is currently trading at $30. The Return on Equity is:

3.3%

6.7%

9.3%

50.0%

1. 2 Points

Assuming net income and shareholders equity are positive, and at least $1 in liabilities, the Return on Investment is:

Always higher than the Return on Equity.

Always equal to the Return on Equity.

Sometimes equal to the Return on Equity.

Always lower than the Return on Equity.

1. 2 Points

A company comparing the use of Straight Line Depreciation (SLD) and Accelerated Depreciation (DDB) in the first year subsequent to the purchase of a capital asset would find:

The Fixed Asset Turnover ratio is highest using SLD.

The Fixed Asset Turnover ratio is highest using DDB.

No difference in the Fixed Asset Turnover ratio.

The Total Asset Turnover ratio is highest using SLD.

1. 2 Points

Which of the following is likely to cause the largest Cash Outflow:

Sale of a 30 Story Office building owned by the company for $120 million.

Purchase a $20,000 copy machine.

Openings a $50,000 line of credit.

An acquisition of a competitor for $1.0 million in stock.

1. 4 Points

If the Cost of Sales for Company Z is $912,500 for the 201X year, and the Days Inventory Held is 25. The value of the Inventory at the end of 201X is:

$ 62,500

$ 36,500

$ 3,042

$ 2,500

1. 4 Points

Sales for Company Y are $100,000 in 201X and the net profit margin is 9.0%. The Return on Equity is 20%. What is the dollar value of Equity?

$ 18,000

$ 45,000

$ 90,000

$ 444,444

1. 2 Points

Company X reports $200,000 in sales of Widgets in 201X. The Costs of Goods sold for these Widgets is $90,000. All other operating expenses (SG&A, R&D, Depreciation, Other, etc.) are $50,000. Which of the following is the correct representation of the profitability ratios for 201X:

Gross Profit Margin 45%, Operating Margin 30%.

Gross Profit Margin 55%, Operating Margin 30%.

Gross Profit Margin 45%, Operating Margin 20%.

Gross Profit Margin 55%, Operating Margin 20%.

1. 2 Points

The current ratio of Company X is 3.0 times. Company X has working capital of $20,000. Total Current Assets for Company X are:

$6,667

$10,000

$30,000

$60,000

1. 4 Points

On December 31, 2017, Inventory for Company X was $30,000. On December 31, 2018 the Inventory amount was $15,000. During 2018, the change in Inventory represented:

A $15,000 Operating Outflow.

A $15,000 Operating Inflow.

A $45,000 Operating Inflow.

A $45,000 Operating Outflow.

1. 2 Points

The Indirect Method of calculating Cash Flow:

Begins with Net Income.

Begins with Revenue.

Shows cash collections from customers.

Is used much less frequently than the Direct Method.

1. 2 Points

On a Cash Flow Statement, Operating activities include:

Establishing a line of credit.

Decreasing Accounts Payable.

Short Term Debt repayment.

Purchasing a company.

All of the following are true regarding projected financial statementsexcept:

The statement of cash flows is the most critical forecast since it reflects profitability rather than viability.

Preparing projected financial statements must incorporate a company's past performance records.

Preparing projected financial statements must incorporate a company's current performance records.

The income statement demonstrates immediate capability to service debt for banks or real potential for growth in returns for venture capital.