Question 17 (2 points) What is the main reason that it is necessary for public companies to follow the rules and format set out in the Generally Accepted Accounting Principles (GAAP) when creating financial statements? It is easier to find specific information in such a report if it is laid out in a clear and consistent manner. It ensures that information on the performance of private companies is readily available to the public OOOOO It ensures that important information is not omitted and superfluous information is not included. It makes it easier to compare the financial results of different firms. To make sure they satisfy the auditor. Question 18 (2 points) A company that produces drugs is preparing a statement of financial position. Which of the following would be most likely to be considered a long-term asset on this statement of financial position? O commercial paper held by the company the inventory of chemicals used to produce the drugs made by the company OOO a patent for a drug held by the company the cash reserves of the company O money owed to the firm by customers who have purchased goods on creditQuestion 19 (2 points) A small company has current assets of $112,000 and current liabilities of $117,000. Which of the following statements about that company is most likely to be TRUE? Since net working capital is negative, the company will not have enough funds to meet its obligations. OOO Since net working capital is high, the company will likely have little difficulty meeting its obligations. Since net working capital is very high, the company will have ample money to invest after it meets its obligations. O Since net working capital is nearly zero, the company is well run and will have little difficulty attracting investors. Since net working capital is negative, the company will likely have little difficulty meeting its obligations. Question 20 (2 points) A firm has EBIT of $4.5 million, interest expense of $400,000, and pays taxes of $1.2 million. If the firm has 2 million shares outstanding, what is the firm's EPS? $1.45 52.25 OO $1.65 OO $1.00