Description : Which of the following is/are true if a firm has a required rate of return equal to the ROE? I. The amount of earnings retained by the firm does not affect market price or the P/E. II. The firm can increase market ... (III) above D. Both (II) and (III) above E. All (I), (II) and (III) above
Last Answer : E. All (I), (II) and (III) above
Description : Marginal cost is the weighted average cost of the new funds raised by the firm. A. True B. False
Last Answer : A. True
Description : All of the following are stockholders’ equity accounts except a. Common Stock. b. Capital Stock. c. Investment in Stock. d. Retained Earnings.
Last Answer : c. Investment in Stock.
Description : The post-closing trial balance contains only a. income statement accounts. b. balance sheet accounts. c. balance sheet and income statement accounts. d. income statement, balance sheet, and retained earnings statement account
Last Answer : b. balance sheet accounts.
Description : ncome Summary has a credit balance of $12,000 in J. Sawyer Co. after closing revenues and expenses. The entry to close Income Summary is a. credit Income Summary $12,000, debit Retained Earnings ... 000, credit Dividends $12,000. d. debit Income Summary $12,000, credit Retained Earnings $12,000.
Last Answer : d. debit Income Summary $12,000, credit Retained Earnings $12,000.
Description : Which account listed below would be double ruled in the ledger as part of the closing process? a. Cash b. Retained Earnings c. Dividends
Last Answer : c. Dividends
Description : After closing entries are posted, the balance in the retained earnings account in the ledger will be equal to a. the beginning retained earnings reported on the retained earnings statement. b. the amount of ... earnings reported on the balance sheet. c. zero. d. the net income for the period.
Last Answer : . b. the amount of retained earnings reported on the balance sheet.
Description : The balance in the income summary account before it is closed will be equal to a. the net income or loss on the income statement. b. the beginning balance in the retained earnings account. c. the ending balance in the retained earnings account. d. zero.
Last Answer : a. the net income or loss on the income statement.
Description : The final closing entry to be journalized is typically the entry that closes the a. revenue accounts. b. dividends account. c. retained earnings account. d. expense accounts.
Last Answer : b. dividends account.
Description : The closing entry process consists of closing a. all asset and liability accounts. b. out the retained earnings account. c. all permanent accounts. d. all temporary accounts.
Last Answer : d. all temporary accounts.
Description : In preparing closing entries a. each revenue account will be credited. b. each expense account will be credited. c. the retained earnings account will be debited if there is net income for the period. d. the dividends account will be debited.
Last Answer : b. each expense account will be credited.
Description : In order to close the dividends account, the a. income summary account should be debited. b. income summary account should be credited. c. retained earnings account should be credited. d. retained earnings account should be debited.
Last Answer : d. retained earnings account should be debited.
Description : If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a a. debit to the retained earnings account. b. debit ... . c. credit to the retained earnings account. d. credit to the owner's dividends account.
Last Answer : c. credit to the retained earnings account.
Description : Closing entries are made a. in order to terminate the business as an operating entity. b. so that all assets, liabilities, and Stockholders' equity accounts will have zero balances when the ... ) and dividends to the retained earnings account. d. so that financial statements can be prepared.
Last Answer : c. in order to transfer net income (or loss) and dividends to the retained earnings account. unt.
Description : Stock price is a function of: a. Book value, Earnings per Share, and Net Profit. b. Book value, Dividend, and Retained Earnings. c. Earnings per Share, Dividend, and Retained Earnings. d. Earnings per Share, Dividend, and Net Profit. e. Book value, Earnings per Share, and Dividend.
Last Answer : e. Book value, Earnings per Share, and Dividend.
Description : The summarized balance sheet of Autolight Limited shows the balances of previous and current year of retained earnings Rs. 25,000 and Rs. 35,000. If dividend paid during the current year amounted to Rs. 5,000 then profit earned during ... (a) Rs. 5,000 (b) Rs. 55,000 (c) Rs. 15,000 (d) Rs. 65,000
Last Answer : (c) Rs. 15,000
Description : You must decide between two mutually exclusive projects. Project A has cash flows of - Rs.10,000; Rs.5,000; Rs.5,000; and Rs.5,000; for years 0 through 3, respectively. Project B has cash flows of -Rs ... B's NPV > Project A's NPV. D. Neither A nor B; The NPVs of both projects are negative.
Last Answer : C. B; Project B's NPV > Project A's NPV.
Description : Which one is more appropriate for cost of retained earning? A. Weighted Average cost of capital B. Opportunity cost to the firm C. Expected rate of return by the investor D. None of the above
Last Answer : B. Opportunity cost to the firm
Description : Normally a performance bond, depending upon the state, only stipulates that the contractor will guarantee the work for a certain period of time. Answer: D (8)Which contract type places the most risk on ... fee 3. Cost plus fixed fee 4. Fixed price plus incentive fee 5. Firm fixed price
Last Answer : 5. Firm fixed price
Description : )A new project was initiated that involves new technology and subsequently has never been done before. What type of contract would to owner want to issue to reduce or eliminate as much risk as possible. 1. Firm ... 2. Cost plus fix fee 3. Cost plus incentive fee 4. Lump sum 5. A and D
Last Answer : 5. A and D
Description : To the nearest rupee, what is the net present value of a replacement project whose cash flows are -Rs.104,000; Rs.34,444; Rs.39,877; Rs.25,000; and Rs.52,800 for years 0 through 4, respectively? The firm has decided to ... -free rate is 6%. A. Rs.15,115 B. Rs.26,798 C. Rs.33,346 D. Rs.48,121
Last Answer : C. Rs.33,346
Description : Assume that a firm has accurately calculated the net cash flows relating to two mutua lly exclusive investment proposals. If the net present value of both proposals exceed zero and the firm is ... maximize shareholder wealth and, since the projects are mutually exclusive, we can only take one
Last Answer : D. accept the proposal that has the largest NPV since the goal of the firm is to maximize shareholder wealth and, since the projects are mutually exclusive, we can only take one
Description : The project manager works with the project sponsor to identify the necessary resources and team members needed to further develop the key project parameters – Cost, Scope, Schedule, and Quality (CSSQ). (True/False)
Last Answer : Ans. True
Description : Scope, cost, and schedule are some of the parameters used for project negotiation. (True/False)
Description : Requirements Management has a high initial start-up cost but does not need ongoing funding throughout a project. a) True b) False
Last Answer : b) False
Description : .In which of the following instances would the independence of the CPA not be considered to be impaired? The CPA has been retained as the auditor of a brokerage firm a. Which owes the CPA audit ... owes the CPA audit fees for services in the current year and has just filed a petition for bankruptcy
Last Answer : Which owes the CPA audit fees for services in the current year and has just filed a petition for bankruptcy
Description : A CPA who has been retained by a client that operates in an industry totally new to him a. May not accept such an engagement. b. May accept the engagement only if the ... to commercial banking. d. May accept the engagement because training as a CPA transcends unique industry characteristics
Last Answer : May accept the engagement after attaining a suitable level of understanding of the transactions and accounting practices unique to commercial banking.
Description : In which of the following instances would the independence of the CPA not be considered to be impaired? The CPA has been retained as the auditor of a brokerage firm a. Which owes the CPA audit ... . Which owes the CPA audit fees for the current year services and just filed a petition for bankruptcy
Last Answer : Which owes the CPA audit fees for the current year services and justfiled a petition for bankruptcy
Description : Which of the following is not included in the assumption on which Myron Gorden proposed a model on Stock valuation A. Retained earning the only source of financing B. Finite Life of the firm C. Taxes do not exist D. Constant rate of return on firms investment.
Last Answer : B. Finite Life of the firm
Description : Which one of the following illustrates why effective project management is beneficial to an organization? a. It utilizes resources as and when required under direction of a project manager. b. ... d. It ensures that the chief executive is accountable for the achievement of the defined benefits.
Last Answer : a. It utilizes resources as and when required under direction of a project manager.
Description : ____ have the principal responsibility of achieving the target goals of the firm and have the decision-making authority.
Last Answer : Ans. Line managers
Description : A firm is about to undertake a project and has computed the NPV of the project using a variety of discount rates: Discount Rate used NPV 10% 130 15% 50 20% -50 What is the approximate IRR of this project? A 20% B 17.5% C 15% D 22.5%
Last Answer : B 17.5%
Description : A Firm is considering undertaking a project that would yield annual profits (after depreciation) of Rs 68,000 for 5 years. The initial outlay of the project would be Rs 800,000 and the project's assets would have ... accounting rate of return for this project? A 16% B 8.5% C 8.0% D 9.1%
Last Answer : A 16%
Description : Walter’s Model suggests that a firm can always increase the value of the share by: A. Increasing dividend B. Decreasing dividend C. Constant Dividend D. None of the
Last Answer : D. None of the
Description : Risk, as it relates to working capital, means that there is jeopardy to the firm for not maintaining sufficient current assets to . A. meet its cash obligations as they occur and take advantage ... above industry norms E. meet its cash obligations as they occur and support the proper level of
Last Answer : D. maintain current and acid-test ratios at or above industry norms
Description : How can a firm provide a margin of safety if it cannot borrow on short notice to meet its needs? A. Maintain a low level of current assets (especially cash and marketable securities) ... the level of fixed assets (especially plant and equipment D. Lengthening the maturity schedule of financing
Last Answer : D. Lengthening the maturity schedule of financing
Description : Which of the following statements is correct for a conservative financing policy for a firm relative to a former aggressive policy? A. The firm uses long-term financing to finance all fixed and current ... its risk profile. D. The firm will increase its dividends per share (DPS) this period.
Last Answer : B. The firm will see an increase in its expected profits.
Description : Under a conservative financing policy a firm would use long-term financing to finance some of the temporary current assets. What should the firm do when a "dip" in temporary current assets causes ... C. Use the excess funds to repurchase common stock. D. Purchase additional plant and equipment.
Last Answer : B. Invest the excess long-term financing in marketable securities.
Description : Your firm has a philosophy that is analogous to the hedging (maturity matching) approach. Which of the following is the most appropriate non-spontaneous form for financing the excess seasonal current asset needs? ... credit. B. 6-month bank notes. C. Accounts payable. D. Common stock equity.
Last Answer : B. 6-month bank notes.
Description : Your firm has a philosophy that is analogous to the hedging (maturity matching) approach. Which of the following is the most appropriate form for financing a new capital investme nt in plant and equipment? A. Trade credit. B. 6-month bank notes. C. Accounts payable. D. Common stock equity
Last Answer : D. Common stock equity.
Description : Which of the following statements is most correct? A. For small companies, long-term debt is the principal source of external financing. B. Current assets of the typical manufacturing firm account ... the financial manager to make a decision and not address the issue again for several months.
Last Answer : B. Current assets of the typical manufacturing firm account for over half of its total assets.
Description : In deciding the optimal level of current assets for the firm, management is confronted with . A. a trade-off between profitability and risk B. a trade-off between liquidity and risk C. a trade-off between equity and debt D. a trade-off between short-term versus long-term borrowing
Last Answer : A. a trade-off between profitability and risk
Description : When operating under a single-period capital-rationing constraint, you may first want to try selecting projects by descending order of their in order to give yourself the best chance to select the mix of ... net present value (NPV) C. internal rate of return (IRR) D. payback period (PBP)
Last Answer : B. net present value (NPV)
Description : . An independent relationship must exist between the attribute that can be measured and the external quality attribute. a) True b) False
Description : Project managers have to assess the risks that may affect a project. a) True b) False
Description : We can accurately estimate lines of code from the problem specification. A. True B. False C. NA D. NA
Last Answer : B. False
Description : "Larger code size doesnot necessarily mean better quality or higher efficiency." A. True B. False C. NA D. NA
Description : An independent relationship must exist between the attribute that can be measured and the external quality attribute. a) True b) False