Module_1_Multiple_Choice_Ans

Module_1_Multiple_Choice_Ans - Module 1 Multiple Choice...

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Module 1 Multiple Choice MC1-1 Return on Net Operating Assets Calculation LO3 Net Income = $7,186, average Net Operating Assets = $53,445 and Net Operating Profit after tax is $8,764. Calculate RNOA. a. a. 13.4% b. b. 29.8% c. c. 16.4% d. d. None of the above Solution c. RNOA = Net Operating Profit After Tax /Average assets. Therefore RNOA equals $7,186 / $53,445 = 16.4%. MC1-2 Components of the Accounting Equation LO2 A list of assets, liabilities and equity can be found on a ________________. a. Balance Sheet b. Income Statement c. Statement of Assets and Liabilities d. Statement of Cash Flows Solution a. A balance sheet reports on investing and financing activities. It lists amounts for assets, liabilities and equity at a point in time. MC1-3 Five Forces of Competitive Industry LO4 Which of the following is NOT one of the five forces that determine a company’s competitive intensity? a. a. Bargaining power of suppliers b. b. Threat of substitution c. c. Ability to obtain financing d. d. Threat of entry Solution c. The five forces of the competitive industry include: industry competitors, bargaining power of buyers, bargaining power of suppliers, threat of substitution, and threat of entry. MC1-4 Return on Net Operating Assets Calculation LO3 If RNOA = 11.8% and Net Operating Profit After Tax = $5,186, what is the value of average Net Operating Assets? e. a. $612 f. b. $42,549 g. c. $61,195 ©Cambridge Business Publishers, 2008 st Edition
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d. $43,949 i. e. None of the above Solution d. RNOA = Net Operating Profit After Tax /Average assets. Therefore average assets = Net income / ROA which equals $5,186 / 0.118 = $43,949. ©Cambridge Business Publishers, 2008
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Module_1_Multiple_Choice_Ans - Module 1 Multiple Choice...

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