FIN200 Final Exam -...

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One of the major disadvantages of a sole proprietorship is  A. low operating costs. B. that there is unlimited liability to the owner. C. the simplicity of decision making. D. low organizational costs. 2) What is the primary goal of financial management?  A. Minimizing risk of the firm B. Increased earnings C. Maximizing cash flow D. Maximizing shareholder wealth 3) Insider trading occurs when  A. any stock transactions occur in violation of the Federal Trade  Commissions restrictions on monopolies. B. someone has information not available to the public which  they use to profit from trading in stocks. C. corporate officers buy stock in their company. D. lawyers, investment bankers, and others buy common stock in  companies represented by their firms. 4) Which of the following is an inflow of cash?  A. the retirement of the firm's bonds B. funds spent in normal business operations C. the purchase of a new factory D. the sale of the firm's bonds 5) Which account represents the cumulative earnings of the firm since its  formation, minus dividends paid?  A. Accumulated depreciation B. Common stock C. Paid-in capital
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D. Retained earnings 6) Which of the following is not a primary source of capital to the firm?  A. bonds B. common stock C. assets D. preferred stock 7) The most rigorous test of a firm's ability to pay its short-term  obligations is its  A. times-interest-earned ratio. B. quick ratio. C. current ratio. D. debt-to-assets ratio. 8) If a firm has both interest expense and lease payments,  A. fixed charge coverage cannot be computed. B. times interest earned will be greater than fixed charge  coverage. C. times interest earned will be smaller than fixed charge coverage. D. times interest earned will be the same as fixed charge coverage. 9) Which of the following is not considered to be a profitability ratio?  A. return on assets (investment) B. times interest earned C. profit margin D. return on equity
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10)    Refer to the figure above. The firm's fixed asset turnover ratio is  A. 0.1x. B. 1.5x. C. 3.1x.
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D. 2x. 11)    Refer to the figure above. The firm's inventory turnover ratio is  A. 0.1x.
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B. 8x. C. 10x. D. 2.7x. 12)   
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Refer to the figure above. The firm's debt to asset ratio is  A. 48%. B. 33%. C. 58%. D. 25%. 13) In financial statements, the number of units shown in cost of goods  sold as compared to the number of the units actually produced  A. can be either higher or lower. B.
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This note was uploaded on 01/05/2012 for the course 101 melissa jo taught by Professor Acc101 during the Spring '11 term at Aarhus Universitet.

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FIN200 Final Exam -...

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