FIN200 exams - Week4 1) A rapid rate of growth in sales may...

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Week4 1) A rapid rate of growth in sales may require A. increased borrowing by the firm to support the sales increase. 2) Net cash flow is equal to: A. income after taxes minus dividends. B. cash receipts minus cash payments minus depreciation. C. cash receipts minus cash payments. D. income after taxes minus depreciation. 3) A firm has beginning inventory of 300 units at a cost of $11 each. Production during the period was 650 units at $12 each. If sales were 700 units, what is the value of the ending inventory using LIFO? D. $2,750 4) A firm utilizing FIFO inventory accounting would, in calculating gross profits, assume that C. sales were from beginning inventory until it was depleted, and then use sales from current production. 5) Combined leverage is concerned with the relationship between A. changes in volume and changes in EPS. 6) Which of the following is concerned with the change in operating profit as a result of a change in volume? C. Operating leverage 7) 1 If sales volume exceeds the break-even point, the firm will experience
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A. an operating profit. 8) A weakness of breakeven analysis is that it assumes: . D. revenue and costs are a linear (constant) function of volume. Week6 1) Permanent current assets are not a factor in a manager's decision making process when all current assets will be A. self-liquidating. B. long-term in nature. C. financed by short-term debt. D. internally financed. 2) A "normal" term structure of interest rates would depict A. no general relationship between short- and long-term rates. B. long-term rates higher than short-term rates. C. short-term rates higher than long-term rates. D. medium rates (1-5 years) lower than both short-term and long-term rates. 3) The theory of the term structure of interest rates which suggests that long-term rates are determined by the average of short-term rates expected over the time that a long-term bond is outstanding is the A. liquidity premium theory. B. segmentation theory. C. expectations hypothesis.
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D. market average rate theory. 4) Frisch Fish Corp expects net income next year to be $600,000. Inventory and accounts receivable will have to be increased by $300,000 to accommodate this sales level. Frisch will pay dividends of $400,000. How much external financing will Frisch Fish need assuming no organically generated increase in liabilities? A. $200,000 B. $100,000 C. No external financing is required. D. $300,000 5) Which of the following is not a true statement about automated clearinghouses (ACHs)? A. Debits drawn on automated clearinghouses cost less than half that of checks processed through financial institutions. B. Commercial transactions using automated clearinghouses have been growing at close to 17% per year since 1989. C.
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FIN200 exams - Week4 1) A rapid rate of growth in sales may...

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