An asset turnover ratio of 1.75 can be interpreted as

1. If a project’s value is less than its required investment, then the project is financially attractive.

2. Which of the firm's financial managers is most likely to be involved with obtaining financing for the firm?

3. Which one of the following is a real asset?

4. A corporate director:

5. When a corporation fails, the maximum that can be lost by an individual shareholder is:

6. In a firm having both a treasurer and a controller, which of the following would most likely be handled by the controller?

7. Which of these duties are responsibilities of the corporate treasurer? Which one of the following statements is not characteristic of mutual funds? They are always considered to be financial institutions.

8. The markets for long-term debt and equity are called capital markets.

9. You can buy silver in the:

10. The rates of return on investments outside the corporation set the minimum return for investment projects inside the corporation.

11. U.S. bonds and other debt securities are mostly held by:

12. A mother in a developing country wants to borrow the equivalent of $20 to enable her to start a small restaurant run by her family. Which type of financing is she looking to obtain?

13. During the Financial Crisis of 2007-2009, the U.S. government bailed out all firms in danger of failing.

14. In general, what is changing as you read down the left-hand side of a balance sheet? Assume tax rates on single individuals are 10% on taxable income up to $9,075, 15% on income of $9,076 to $36,900 and 25% on income of $36,901 to $89,350. What is the tax liability for a single individual with $52,000 of taxable income, which includes $2,000 of dividends?

15. Accrual accounting, which attempts to match sales revenues and the expenses associated with the production of the goods, is conducted in an attempt to: reduce bias in reported profitability measures.

16. Assume a firm generates $2,000 in sales and has a $500 increase in accounts receivable during an accounting period. Based solely on this information, cash flow will increase by:

17. The existence of goodwill on a corporate balance sheet indicates that the corporation has: intangible assets from past acquisitions.

18. According to GAAP, assets and liabilities are typically recorded on the balance sheet at:

19. What happens to a firm's net worth as it uses cash to repay accounts payable? Perhaps the best method for estimating the market value of shareholders' equity is to

20. When Tri-C Corp. compares its ratios to industry averages, it has a higher current ratio, an average quick ratio, and a lower inventory turnover. What might you assume about Tri-C

21. A company has total assets of $1,000, current liabilities of $130, and total liabilities of $350. What is the long-term debt ratio?

Equity = assets - liabilities
Equity = $1,000 - 350
Equity = $650

Long-term debt ratio = long-term debt/(long-term debt + equity)
Long-term debt ratio = ($350 - 130)/[($350 - 130) + $650]
Long-term debt ratio = .25

22. Assume BDS acquired its main supplier, ABC. As a result of the acquisition, BDS finds that its profit margin increased but its ROA remained constant. A decrease in which one of these ratios is most apt to be the reason why the ROA did not increase with the increase in the profit margin?

23. Which one of these changes indicates an improvement in a firm's asset management efficiency?

24. What is the ROA of a firm with $150,000 in average receivables, which represents 60 days sales, average assets of $750,000, and a profit margin of 9%?

Sales = ($150,000/60) × 365 = $912,500
ROA = Profit margin × Asset turnover
= .09 × ($912,500/$750,000)
= .1095, or 10.95%

25. Which one of these costs accounts for the difference between accounting income and economic value added?

26. Calculate the average collection period for Dots Inc. if its accounts receivables were $550 at the beginning of a year in which the firm generated $3,000 of sales?

Average collection period = $550/($3,000/365) = 67 days

27. Efficiency ratios:

28. A major disadvantage of partnerships is that they have double taxation of profits.

29. Which one of these determines the minimum acceptable rate of return on a capital investment?

30. Making good investment and financing decisions is the chief task of the financial manager

31. Financial assets have value because they are claims on the firm's real assets and the cash that those assets will produce.

32. Which one of the following statements more accurately describes the controller than the treasurer?

33. A corporate board of directors should provide support for the top management team: Maximizing profits is the same as maximizing the value of the firm.

34. The reinvestment of cash back into the firm's operations is an example of a flow of savings to investment.

35. The stocks of major corporations trade in many markets throughout the world on a continuous or near-continuous basis.