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

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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
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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...
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