BUS401 Wk 1 - Company B has a higher return on assets 3....

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
1. Smith Corporation has earned a return on capital of 10% for the past two years, but an investment analyst reviewing the company had stated the company is not creating shareholder value. This may be due to the fact that _________ (Points : 1) The risk free rate of interest is 3% The corporation's inventory turnover is high Investor’s required rate of return is 8 % Investor’s required rate of return is 12 %. 2. Company A and Company B have the same profit margin and the same total asset turnover, but company A has a higher return on equity. This may result from ____________ (Points : 1) Company B has more common stock Company A has a higher debt ratio Company A had a higher return on assets
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Company B has a higher return on assets 3. Global.Com has cash of $75,000; short term notes payable of $100,000; accounts receivable of $275,000; accounts payable of $135,000; inventories of $350,000; and accrued expenses of $75,000. What is Global’s net working capital? (Points : 1) $ 390,000 $ 175,000 $ 700,000 $ 210,000 4. Which of the following will likely result in a greater use of external financing? (Points : 1) Higher corporate profits and higher interest rates Lower corporate profits and lower interest rates Higher corporate profits and lower interest rates Lower corporate profits and higher interest rates...
View Full Document

This note was uploaded on 05/01/2011 for the course BUS 401 taught by Professor Thomasbiggers during the Spring '10 term at Ashford University.

Ask a homework question - tutors are online