Finance 320 Milestone 1 Questions and Answers Already Graded A

You passed this Milestone 27 questions were answered correctly. 1 If net income is $90 million and total assets are $480 million, then the ROA is __________.  incalculable without EBIT data  25.00%  18.75% ...

You passed this Milestone 27 questions were answered correctly. 1 If net income is $90 million and total assets are $480 million, then the ROA is __________.  incalculable without EBIT data  25.00%  18.75%  incalculable without gross profit data CONCEPT Profitability Ratios 2 Under what circumstance would agency conflict be most likely to increase?  When owners are very close to the business.  When the incentives of a manager align with those of owners.  When owners are separated from the business.  When oversight by the board is adequate. CONCEPT Agency and Conflicts of Interest 3 Ratios that measure a company's ability to manage its long-term debt are _________.  profitability ratios  liquidity ratios  efficiency ratios  leverage ratios CONCEPT Overview of Ratio Analysis 4 What must be forecasted first in order to prepare the pro forma income statement?  Net income  Expenses  Cost of goods sold  Sales CONCEPT Forecasting the Income Statement 5 Using the DuPont equation, how can a company determine if it has an acceptable ROE?  If it is over 30%.  If it is over 50%.  If it is between 2-3%.  If it is at least 15%. CONCEPT The DuPont Equation 6 What is a question that should be asked about accounts payable when forecasting?  How will our cash inflows be affected?  What is the cash conversion cycle?  How quickly can we replenish goods?  How much product on hand is too much? CONCEPT Analyzing Forecasts 7 Consider the following information: Total current assets $78,632 Deferred income taxes $3,210 Inventories $9,823 Prepaid expenses $1,050 Other assets $3,890 Total current liabilities $32,043 What is the quick ratio?  2.15  2.45  2.32  2.24 CONCEPT Liquidity Ratios 8 Under GAAP, how would dividends paid to company stockholders be accounted for on the statement of cash flows?  As a decrease in cash flow from financing  As an increase in cash flow from operations  As an increase in cash flow from financing  As a decrease in cash flow from investment CONCEPT The Statement of Cash Flows 9 Which of the following would explain a company’s inventory turnover ratio rising from 2.5 to 3.5?  The company's cost of goods sold has decreased while the average inventory has remained constant.  The company's cost of goods sold has remained constant while the average inventory has decreased.  The company's total sales has decreased while the average inventory has increased.  The company's total sales has decreased while the average inventory has remained constant. CONCEPT Asset Management Ratios 10 The primary factor behind all of finance is __________.  equity  debt  money  time CONCEPT Introducing Finance 11 The process of predicting what the market would pay for a company's investments and bonds is __________.  appraisal  valuation  financial management  assessment CONCEPT Goals of Financial Management 12 By appropriately preparing a forecast budget, a company can avoid __________.  a net loss  regulation  insolvency  inventory shortages CONCEPT Building a Cash Budget 13 Tom and Wendy are launching a life coaching business. They plan to have an equal say in any managerial business decisions and they plan to share any profits or losses. They are concerned about their exposure to liability, so they have purchased some professional insurance policies. However, they are pleased with how simple it has been to organize their business. Which form of business structure have Tom and Wendy likely adopted?  Corporation  S corporation  Sole proprietorship  Partnership CONCEPT Types of Business Organizations 14 Which organization most fully protects owners from personal liabilities and is taxed separately?  LLC  S Corp  Partnership  C Corp CONCE