Mid1s-S10 - Financial Economics Midterm 1 Spring 2010 Prof....

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Midterm 1 Spring 2010 Prof. Farshid Mojaver There are 26 MC questions 1.5 points each, please mark the best answer in your scantron. 1. Book value: A. is equivalent to market value for firms with fixed assets. B. is based on historical cost. C. generally tends to exceed market value when fixed assets are included. D. is more of a financial than an accounting valuation. E. is adjusted to market value whenever the market value exceeds the stated book value. 2. Which of the following statements concerning the income statement is true? A. It measures performance over a specific period of time. B. It determines after-tax income of the firm. C. It includes deferred taxes. D. It treats interest as an expense. E. All of the above. 3. Financial ratios that measure a firm's ability to pay its bills over the short run without undue stress are known as _____ ratios. A. asset management B. long-term solvency C. short-term solvency D. profitability E. market value 4. Ratios that measure a firm's financial leverage are known as _____ ratios. A. asset management B. long-term solvency C. short-term solvency D. profitability E. market value 5. Ratios that measure how efficiently a firm uses its assets to generate sales are known as _____ ratios. A . asset management B. long-term solvency C. short-term solvency D. profitability E. market value 6. Ratios that measure how efficiently a firm's management uses its assets and equity to generate bottom line net income are known as _____ ratios. A. asset management B. long-term solvency C. short-term solvency D. profitability E. market value 7. A total asset turnover measure of 1.03 means that a firm has $1.03 in: A. total assets for every $1 in cash. B. total assets for every $1 in total debt. C. total assets for every $1 in equity. D . sales for every $1 in total assets. E. long-term assets for every $1 in short-term assets. 8. If a firm produces a 10% return on assets and also a 10% return on equity, then the firm: A . has no debt of any kind. B. is using its assets as efficiently as possible.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

Mid1s-S10 - Financial Economics Midterm 1 Spring 2010 Prof....

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online