4L for solution
blakli
question_4f.docxQuestion 1
1.
Pro forma financial statements are used to:
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a. find the contribution margin |
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b. show the results of some assumed event |
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c. predict the sensitivity of different output variables |
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d. show the results of an actual event |
0.4 points
Question 2
1.
An example of an investing activity is:
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a. Issuing new corporate stock |
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b. Paying corporate income taxes |
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c. Buying new computers |
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d. Taking out a new loan. |
0.4 points
Question 3
1.
The value of debt and equity securities is based upon:
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a. The type of investment vehicle |
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b. The growth potential of the asset |
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c. The accounting method used for recording the asset |
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d. The present value of the cash flows that the securities are expected to provide. |
0.4 points
Question 4
1.
Which of the following is defined as the systematic allocation of the cost of an asset over more than one period?
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a. Deferral |
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b. Expensing |
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c. Optimization |
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d. Depreciation |
0.4 points
Question 5
1.
Peerless believes that its sales next year will increase 20 percent from the current level of $800,000. Management calculates that assets must increase $110,000 to support the new sales level, and current liabilities will increase $70,000. What total financing will be needed?
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a. $40,000 |
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b. $1,600 |
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c. $33,600 |
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d. $8,000 |
0.4 points
Question 6
1.
In preparing a statement of cash flows, the ____ method involves adjusting net income to reconcile it to net cash flows from operating activities.
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a. direct |
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b. indirect |
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c. accrual |
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d. none of the above |
0.4 points
Question 7
1.
Ship-to-Shore earned $280,000 after taxes last year. Its expenses included depreciation of $55,000, interest expenses of $40,000 and deferred taxes of $20,000. The company also purchased two new fresh water fishing boats for $40,000 ($20,000) each. What is Ship-to-Shore?s after-tax cash flow for last year?
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a. $395,000 |
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b. $355,000 |
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c. $315,000 |
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d. $280,000 |
0.4 points
Question 8
1.
Dippity Doo-Dah Party Dips has revenues of $50,000, general & administrative expenses of $35,000, interest expense of $4,000 and depreciation expense of $4200. The firm is in the 38% tax bracket. What would be the firm s cash flow from operations?
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a. $4216 |
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b. $4000 |
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c. $8416 |
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d. $6,800 |
0.4 points
Question 9
1.
The financial statement that shows the effects of a company?s operating, investing, and financing activities on its cash balance is known as the:
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a. cash budget statement |
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b. pro forma financial statement |
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c. statement of cash flows |
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d. breakeven analysis |
0.4 points
Question 10
1.
To decrease the additional financing needed to support an increase in sales, management can
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a. decrease notes payable |
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b. retire common stock |
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c. increase the dividend payout |
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d. cut dividends |
0.4 points
Question 11
1.
In the percent-of-sales forecasting method, which of the following is (are) assumed to increase proportionately with sales?
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a. Cash |
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b. accounts receivable |
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c. accounts payable |
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d. all of the above |
0.4 points
Question 12
1.
Cash budgeting can be employed effectively by management to
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a. identify potential cash flow problems in advance |
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b. aid them in capital budgeting |
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c. control retained earnings |
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d. coordinate cash and deferred expenses |
0.4 points
Question 13
1.
All the following current liabilities normally vary directly with the sales except:
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a. accounts payable |
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b. notes payable |
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c. accrued wages |
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d. accrued taxes |
0.4 points
Question 14
1.
Using a cash budget is more useful than the percentage of sales method because: I. It can more precisely estimate the amount of financing needed. II. It can better estimate the time of financing need.
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a. I only |
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b. II only |
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c. Both I and II |
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d. Neither I nor II |
0.4 points
Question 15
1.
A good operational plan incorporates a plan for:
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a. the unionization of its business. |
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b. a solid organizational chart with detailed job descriptions. |
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c. the resources a firm will need to obtain its long term objectives. |
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d. all of the above |
