The present value of a lump-sum future amount:

a. increases as the interest rate decreases.

b. decreases as the time period decreases.

c. is inversely related to the future value.

d. is directly related to the interest rate.

e. is directly related to the time period.

The cash ratio is used to evaluate the:

a. liquidity of a firm.

b. speed at which a firm generates cash.

c. length of time that a firm can pay its bills if no additional cash becomes available.

d. ability of a firm to pay the interest on its debt.

e. relationship between the firm's cash balance and its current liabilities.

If a firm has an inventory turnover of 15, the firm:

a. sells its entire inventory every 15 days.

b. stocks its inventory only once every 15 days.

c. delivers inventory to its customers every 15 days.

d. sells its inventory by granting customers 15 days' of free credit.

e. sells its entire inventory an average of 15 times each year.

Kendall is investing $3,333 today at 3 percent annual interest for three years. Which one of the following will increase the future value of that amount?

a. Shortening the investment time period

b. Paying interest only on the principal amount

c. Paying simple interest rather than compound interest

d. Paying interest only at the end of the investment period rather than throughout the investment period

e. Increasing the interest rate

Financial statement analysis:

a. is primarily used to identify account values that meet the normal standards.

b. is limited to internal use by a firm's managers.

c. provides useful information that can serve as a basis for forecasting future performance.

d. provides useful information to shareholders but not to debt holders.

e. is enhanced by comparing results to those of a firm's peers but not by comparing results to prior periods.

Which one of the following is a measure of long-term solvency?

a. Price-earnings ratio

b. Profit margin

c. cash coverage ratio

d. receivables turn over

e. quick ratio