Problem 1 (20 points; 15 minutes) Multiple choices: Please put your answer in the bracket. [B ] 1. In 2009, Gene Tech reported a current ratio of 2.75 and in 2008 it was 3.10. Which of the following could explain the fall in this ratio? A. A decrease in accounts payable. B. A decrease in inventories. C. An increase in short-term investments. D. All of the above. [C ] 2. On January 1, 2009, Simko Company acquired a truck that had a purchase price of $20,000. The seller agreed to allow Simko to pay for the truck over a three-year period at 10% interest with equal payments due at the end of 2009, 2010 and 2011. The amount of each annual payment the company must make is (round to the nearest dollar) [D ] 3. Which of the following is an advantage of issuing bonds versus issuing stocks to finance expansion? [C ] 4. To determine whether a bond will be sold at a premium, discount or at par, one must know which of the following information?
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