Practice_prelim #2 - 1. Financial leverage refers to the:...

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1. Financial leverage refers to the: a. amount of debt used in a firm’s capital structure. b. ratio of retained earnings to shareholders’ equity. c. ratio of paid-in surplus to shareholders’ equity. d. ratio of cost-of-goods-sold to total sales. e. amount of receivables present in the firm’s asset structure. 2. The common set of standards and procedures by which audited financial statements are prepared is known as the: a. matching principle. b. Financial Accounting Standards Board (FASB). c. Generally Accepted Accounting Principles (GAAP). d. Certified Public Account (CPA). e. Congressional Omnibus Budget Reconciliation Act (COBRA) 3. Your _____ tax rate is the amount of tax payable on the next taxable dollar you earn. a. deductible b. residual c. total d. average e. marginal 4. A firm has net working capital of $350. Long-term debt is $600, total assets are $950 and fixed assets are $400. What is the amount of the total liabilities? a. $200 b. $400 c. $600 d. $800 e. $1,200 5. The total long-term debt and equity of the firm is frequently called: a. total assets. b. total capitalization . c. total financing. d. debt-equity consolidation. e. debt-equity reconciliation. 6. According to the statement of cash flows, an increase in accounts receivable will _____ the cash flow from _____ activities. a. decrease; operating b. decrease; financing c. increase; operating d. decrease; financing e. decrease; investment
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7. The internal rate of return (IRR): I. rule states that a project with an IRR that is less than the required rate should be accepted. II.
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This note was uploaded on 08/18/2008 for the course HADM 2225 taught by Professor Wellman, j during the Fall '08 term at Cornell University (Engineering School).

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Practice_prelim #2 - 1. Financial leverage refers to the:...

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