A+ Answers of the following Questions

Question:

Explain when would you use the Z-test and when would you use the T-test?

1. Book value, or net book value, refers to
A) the statement of a firm's financial position at one point in time, including its assets and the claims on those assets by creditors and owners.
B) the price for which something could be bought or sold in a reasonable length of time, where reasonable length of time is defined in terms of the item's liquidity
C) an agent-manager never making bad decisions
D) the net of assets less liabilities shown in the accounting statements.

2. A company's beta is -1.5. If the overall stock market decreases by 5%, what is the expected change in the firm's stock price? 
A. share price decrease by 5%, 
B. share price decreases by 6.5%, 
C. share price increases by 7.5%, 
D. share price decreases by 7.5%?

3. If you were willing to bet that the overall stock market was heading up on a sustained basis, it would be logical to invest in
A. high beta stocks
B. low beta stocks
C. stocks with large amounts of unique risk
D. stocks that plot below the security market line

1. Stony Products has an inventory conversion period (ICP) of about 70 days. The receivables collection period (RCP) is 30 days. The payables deferral period (PDP) is about 40 days. What is Stony's cash conversion cycle (CCC)?
A. 100 Days
B. 60 Days
C. 140 Days
D. 70 Days

2. A company's beta is -1.5. If the overall stock market decreases by 5%, what is the expected change in the firm's stock price? 
A. share price decrease by 5%, 
B. share price decreases by 6.5%, 
C. share price increases by 7.5%, 
D. share price decreases by 7.5%?

3. Book value, or net book value, refers to
A) the statement of a firm's financial position at one point in time, including its assets and the claims on those assets by creditors and owners.
B) the price for which something could be bought or sold in a reasonable length of time, where reasonable length of time is defined in terms of the item's liquidity
C) an agent-manager never making bad decisions
D) the net of assets less liabilities shown in the accounting statements.

1. Which of the following does not cause accounting profit and cash flow to differ
a. depreciation
b. sales made on credit
c. payroll expense
d. inventory purchased, but not yet sold

2. The net book value of an asset is
a. Original cost less the current year's depreciation expense.
b. Original cost less accumulated depreciation.
c. Current market value of the asset less associated selling expense.
d. Current market value of the asset.

3. Which of the following will increase equity?
a. An increase in dividends paid
b. Issuance of new stock
c. An increase in retained earnings from net income or EAT
d. Both b & c
e. All of the above

1. Which is equivalent to EBIT assuming the firm has no leverage?
a. EBT
b. EAT
c. EAT + Depreciation
d. Gross Margin + Depreciation

2. Which of the following is a tax deductible expense?
a. Repayment of the principle portion of a loan
b. Dividends
c. The purchase of inventory
d. Depreciation

3. Which of the following is not a time value key?
a. n
b. I/Y
c. LN
d. PMT
e. FV