American Public University FINCFinc400 quiz 1-8
art 1 of 1 – Week 1 |
The firm’s
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Question 2 of 25 |
4.0 Points |
The primary disadvantage
of accrual accounting is that
A.it |
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B.it |
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C.it |
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D.it
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Gross profit is equal
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Question 5 of 25 |
4.0 Points |
The higher the profit of
a firm, the higher the value the firm is assured of receiving in the market.
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uestion |
4.0 Points |
Ratios are used to
compare different firms in the same industry.
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The Sarbanes-Oxley Act
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uestion 8 of 25 |
4.0 Points |
Which of the following
is not subtracted out in arriving at operating income?
A.interest |
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B.cost |
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C.depreciation |
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D.selling |
Question 9 of 25 |
4.0 Points |
Which of the following
is not a primary source of capital to the firm?
A.assets |
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B.common |
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C.preferred |
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D.bonds |
Question 10 of 25 |
4.0 Points |
A firm has $1,500,000 in
its common stock account and $1,000,000 in its paid-in capital account. The
firm issued 100,000 shares of common stock. What was the original issue price
if only one stock issue has ever been sold?
A.$35 |
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B.$25 |
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C.$15 |
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D.Not |
Question 11 of 25 |
4.0 Points |
Debt utilization ratios
are used to evaluate the firm’s debt position with regard to its asset base and
earning power.
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uestion 12 of 25 |
4.0 Points |
A firm with earnings per
share of $3 and a price-earnings ratio of 20 will have a stock price of
A.$60.00 |
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B.$15.00 |
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C.$6.67 |
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D.the |
Question 13 of 25 |
4.0 Points |
The P/E ratio is
strongly related to the past performance of the firm.
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Question 14 of 25 |
4.0 Points |
Money markets would
include which of the following securities?
A.common |
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B.treasury |
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C.certificates |
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D.all |
uestion 15 of 25 |
4.0 Points |
Agency theory assumes
that corporate managers act to increase the wealth of corporate shareholders.
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Question 16 of 25 |
4.0 Points |
Preferred stock is
excluded from stockholders equity because it does not have full voting rights.
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Question 17 of 25 |
4.0 Points |
Sales minus cost of
goods sold is equal to earnings before taxes.
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Question 20 of 25 |
4.0 Points |
Asset utilization ratios
relate balance sheet assets to income statement sales.
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Question 21 of 25 |
4.0 Points |
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Financial markets exist
as a vast global network of individuals and financial institutions that may be
lenders, borrowers, or owners of public companies worldwide.
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Question 22 of 25 |
4.0 Points |
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Which of the following
is an outflow of cash?
A.profitable |
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B.the |
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C.the |
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D.the |
uestion 23 of 25 |
4.0 Points |
The Bubba Corp. had
earnings before taxes of $400,000 and sales of $2,000,000. If it is in the 40%
tax bracket its after-tax profit margin is:
A.40% |
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B.12% |
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C.20% |
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D.25% |
Question 24 of 25 |
4.0 Points |
The income statement is
the major device for measuring the profitability of a firm over a period of
time.
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Question 25 of 25 |
4.0 Points |
Which of the following
is an inflow of cash?
A.funds |
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B.the |
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C.the |
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D.the |
Week 2
Question 1 of 25 4.0
Points
A lower price for the firm’s product will reduce the firm’s
breakeven point.
A. True
B. False
Question 2 of 25 4.0
Points
(point) Profit is generally adequate to finance significant
growth.
A. True
B. False
Question 3 of 25 4.0
Points
If a firm has a break-even point of 40,000 units and the
contribution margin on the firm’s single product is $4.00 per unit and fixed
costs are $60,000, what will the firm’s operating profit be at sales of 40,000
units?
A.$100,000
B.$30,000
C.$15,000
D.$145,000
Question 4 of 25 4.0
Points
(point) The break-even point can be calculated as
A.variable costs divided by contribution
margin.
B.total costs divided by contribution margin.
C.variable cost times contribution margin.
D.fixed cost divided by contribution margin.
Question 5 of 25 4.0
Points
The degree of combined leverage is the sum of the degree of
operating leverage and the degree of financial leverage.
A. True
B. False
Question 6 of 25 4.0
Points
If fixed costs rise while other variables stay constant
A.the breakeven point rises.
B.degree of operating leverage increases.
C.total profit declines.
D.all of these
Question 7 of 25 4.0
Points
Operating leverage emphasizes the impact of using fixed
assets in the business.
A. True
B. False
Question 8 of 25 4.0
Points
(point) In financial statements, the number of units shown
in cost of goods sold as compared to the number of the units actually produced
A.is higher.
B.is lower.
C.is the same.
D.can be either higher or lower.
Question 9 of 25 4.0
Points
The contribution margin is equal to price per unit minus
total costs per unit.
A. True
B. False
Question 10 of 25 4.0
Points
(point) Which of the following is most likely to increase
the final number for notes payable in the pro forma balance sheet?
A.decrease in inventory.
B.increase in retained earnings.
C.decrease in accounts payable.
D.decrease in accounts receivable.
Question 11 of 25 4.0
Points
An increase in sales and profits generates the necessary
cash required for economic growth.
A. True
B. False
Question 12 of 25 4.0
Points
The percent-of-sales forecast is likely to be most accurate
when used with cyclical companies.
A. True
B. False
Question 13 of 25 4.0
Points
Pro forma financial statements are
A.the most comprehensive means of financial
forecasting.
B.often required by prospective creditors.
C.projections of financial statements for a
future period.
D.all of these.
Question 14 of 25 4.0
Points
(point) When the cost of raw materials is increasing, FIFO
accounting
A.yields higher ending inventory values than
LIFO.
B.produces higher unit sales than using LIFO.
C.yields higher cost of goods sold than LIFO.
D.All of these.
Question 15 of 25 4.0
Points
(point) If sales volume exceeds the break-even point, the
firm will experience
A.an operating loss.
B.an operating profit.
C.an increase in plant and equipment.
D.an increase in stock price.
Question 16 of 25 4.0
Points
The value of ending inventory should be equal to beginning
inventory plus total production costs minus cost of goods sold.
A. True
B. False
Question 17 of 25 4.0
Points
(point) Leverage works best when volume is increasing.
A. True
B. False
Question 18 of 25 4.0
Points
(point) The percent-of-sales method would be more accurate
under a steady sales assumption than cyclical sales.
A. True
B. False
Question 19 of 25 4.0
Points
If the price per unit decreases because of competition but
the cost structure remains the same
A.the breakeven point rises.
B.the degree of combined leverage declines.
C.the degree of financial leverage declines.
D.All of these
Question 20 of 25 4.0
Points
Sales (100,000 units)
$ 1,000,000
Variable costs 300,000
Contribution margin 700,000
Fixed manufacturing costs 200,000
Operating income 500,000
Interest 75,000
Earnings before taxes 425,000
Taxes (30%) 127,500
Net Income
$ 297,500
Refer to the figure above. The Degree of Operating Leverage
is
A.1.40x
B.1.56x
C.3.33x
D.2.22x
Question 21 of 25 4.0
Points
(point) The percent-of-sales method for financial
forecasting assumes that balance sheet accounts maintain a constant
relationship to sales.
A. True
B. False
Question 22 of 25 4.0
Points
(point) As the contribution margin rises, the breakeven
point goes down.
A. True
B. False
Question 23 of 25 4.0
Points
(point) In the percent-of-sales method, an increase in
dividends
A.will increase required new funds.
B.will decrease required new funds.
C.has no effect on required new funds.
D.more information is needed.
Question 24 of 25 4.0
Points
Which of the following is not true about leverage?
A.operating leverage influences the top half
of the income statement, determining EBIT.
B.financial leverage deals with the bottom
half of the income statement, determining EPS
C.combined leverage utilizes the entire income
statement, showing the impact of change in volume on EBIT.
D.none of these
Question 25 of 25 4.0
Points
The finance department should work independently without the
input of other departments because there may be significant biases when
creating proformas.
A. True
B. False
Week 3
All rest attached in the docment