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questions MBC Investment Company invest $ 4,000,000 to clear a land for (1 the purpose of setting a young trees, the trees will have 15 years

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questions 1 ( MBC Investment Company invest $ 4,000,000 to clear a land for the purpose of setting a young trees, the trees will have 15 years perfect life . After 15 years MBC will sell the land at an expected price of $8,000,000 . 2 ( Which of the following statements is most correct ? A . One of the ways in which firms can mitigate or reduce agency problems between bondholders and stockholders are by increasing the amount of debt in the capital structure . B . The threat of takeover is one way in which the agency problem between stockholders and managers can be alleviated . C . Managerial compensation can be structured to reduce agency problems between stockholders and managers . D . Statements b and c are correct . E . All of the statements above are correct 3 ( Determine a firm's total asset turnover (TAT) if its net profit margin (NPM) is 5 percent, total assets are $8 million, and ROI is 8 percent . 4 ( Felton Farm Supplies, Inc., has an 8 percent return on total assets of $300,000 and a net profit margin of 5 percent. What are its sales ? 5 ( Which of the following would NOT improve the current ratio ? A . Borrow short term to finance additional fixed assets . B . Issue long-term debt to buy inventory . C . Sell common stock to reduce current liabilities . D . Sell fixed assets to reduce accounts payable .
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6 ( The gross profit margin is unchanged, but the net profit margin declined over the same period. This could have happened if : A . Cost of goods sold increased relative to sales . B . Sales increased relative to expenses . C . the U.S. Congress increased the tax rate . D . Dividends were decreased . 7 ( Palo Alto Industries has a debt-to-equity ratio of 1:6 compared with the industry average of 1:4 , This means that the company : A . Will not experience any difficulty with its creditors . B . Has less liquidity than other firms in the industry . C . Will be viewed as having high creditworthiness . D . Has greater than average financial risk when compared to other firms in its industry . 8 ( A company can improve (lowering) its debt-to-total assets ratio by doing which of the following ? A . Borrow more . B . Shift short-term to long-term debt . C . Shift long-term to short-term debt . D . Sell common stock . 9 ( Which of the following statements (in general) is correct ? A . A low receivables turnover is desirable . B . The lower the total debt-to-equity ratio, the lower the financial risk for a firm . C . An increase in net profit margin with no change in sales or assets means a poor ROA . D . The higher the tax rate for a firm, the lower the interest coverage ratio . 10 ( The basic financial statements include a
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