Question 1

Which one of the following is NOT included in operating income?

Accepted Answer

A) sales 
B) depreciation 
C) interest expense 
D) cost of goods sold 
E) other operating expenses 
A) sales 
B) depreciation 
C) interest expense 
D) cost of goods sold 
E) other operating expenses

Question 2

Whole Wheat Farms,Inc.has a net income of $20,000 and a dividend payout ratio of 30 percent.The firm issued $12,000 worth of common stock during the period.The firm has no long-term debt.What is the financing cash flow for the period?

Accepted Answer

A) $2,500 
B) $3,000 
C) $6,000 
D) $9,000 
E) $25,000 
A) $2,500 
B) $3,000 
C) $6,000 
D) $9,000 
E) $25,000

Question 3

Which one of the following statements related to book value per share (BVPS)is correct?

Accepted Answer

A) BVPS is equal to total assets divided by the number of shares outstanding. 
B) An increase in the market value of a firm's fixed assets will increase the firm's BVPS. 
C) The payment of a dividend increases BVPS. 
D) BVPS is equal to the market price of a share of stock. 
E) The issuance of new shares at market value may increase the BVPS. 
A) BVPS is equal to total assets divided by the number of shares outstanding. 
B) An increase in the market value of a firm's fixed assets will increase the firm's BVPS. 
C) The payment of a dividend increases BVPS. 
D) BVPS is equal to the market price of a share of stock. 
E) The issuance of new shares at market value may increase the BVPS.

Question 4

Which one of the following is the cash flow resulting from the payment of dividends and the issuance or repurchase of equity securities?

Accepted Answer

A) balance sheet cash flow 
B) operating cash flow 
C) financing cash flow 
D) business cash flow 
E) investment cash flow 
A) balance sheet cash flow 
B) operating cash flow 
C) financing cash flow 
D) business cash flow 
E) investment cash flow

Question 5

A firm has net income of $22,500 and a book value per share of $3.10.The firm has 30,000 shares of stock outstanding and a price-earnings ratio of 15.9.What is the price-book ratio?

Accepted Answer

A) 1.7 
B) 2.4 
C) 2.7 
D) 3.8 
E) 4.3 
A) 1.7 
B) 2.4 
C) 2.7 
D) 3.8 
E) 4.3

Question 6

Which one of the following is most apt to be constant given the percentage of sales approach to creating pro forma statements?

Accepted Answer

A) book value per share 
B) gross margin 
C) earnings per share 
D) return on equity 
E) cash flow per share 
A) book value per share 
B) gross margin 
C) earnings per share 
D) return on equity 
E) cash flow per share

Question 7

A firm has net sales of $35,000,operating expenses of $6,100,depreciation of $1,700,and cost of goods sold of $18,300.What is the gross margin?

Accepted Answer

A) 31.1 percent 
B) 35.4 percent 
C) 47.7 percent 
D) 52.9 percent 
E) 59.2 percent 
A) 31.1 percent 
B) 35.4 percent 
C) 47.7 percent 
D) 52.9 percent 
E) 59.2 percent

Question 8

Which one of the following provides information on a firm's assets and liabilities as of a particular date?

Accepted Answer

A) cash flow statement 
B) pro-forma income statement 
C) income statement 
D) tax return 
E) balance sheet 
A) cash flow statement 
B) pro-forma income statement 
C) income statement 
D) tax return 
E) balance sheet

Question 9

Which of the following reports are always included in a 10K filing with the SEC?
I.statement of cash flows
II.balance sheet
III.pro-forma statement
IV.income statement

Accepted Answer

A) I only 
B) IV only 
C) II, III, and IV only 
D) I, II, and IV only 
E) I, II, III, and IV 
A) I only 
B) IV only 
C) II, III, and IV only 
D) I, II, and IV only 
E) I, II, III, and IV

Question 10

What is the investment cash flow?

Accepted Answer

A) -$220 
B) -$140 
C) -$120 
D) -$20 
E) -$10 
A) -$220 
B) -$140 
C) -$120 
D) -$20 
E) -$10

Question 11

A decrease in which one of the following will increase the return on assets?

Accepted Answer

A) long-term debt 
B) sales 
C) inventory 
D) retained earnings 
E) dividends paid 
A) long-term debt 
B) sales 
C) inventory 
D) retained earnings 
E) dividends paid

Question 12

A firm has the following account balances for this year.Sales for the year are $420,000.Projected sales for next year are $441,000.The percentage of sales approach is used for pro forma purposes.All balance sheet accounts,except long-term debt and common stock,change according to that approach.The firm plans to decrease the long-term debt balance by $23,500 next year.Retained earnings is expected to increase by $5,400 next year.What is the projected external financing need?

Accepted Answer

A) -$14,150 
B) -$6,850 
C) $32,850 
D) $36,000 
E) $56,350 
A) -$14,150 
B) -$6,850 
C) $32,850 
D) $36,000 
E) $56,350

Question 13

Regulation FD requires companies to do which one of the following when disclosing material non-public information?

Accepted Answer

A) advise the SEC 7 working days prior to such disclosure 
B) disclose the information without preference to any party or parties 
C) only disclose the information to professional analysts 
D) only disclose the information after a 7-day advance notice of an announcement 
E) disclose the information only after a 24-hour delay 
A) advise the SEC 7 working days prior to such disclosure 
B) disclose the information without preference to any party or parties 
C) only disclose the information to professional analysts 
D) only disclose the information after a 7-day advance notice of an announcement 
E) disclose the information only after a 24-hour delay

Question 14

Which one of the following is an ownership interest in a firm?

Accepted Answer

A) asset 
B) expense 
C) net income 
D) liability 
E) equity 
A) asset 
B) expense 
C) net income 
D) liability 
E) equity

Question 15

Which of the following affect the earnings per share?
I.decrease in interest expense
II.share repurchase
III.increase in tax rates
IV.preferred stock dividend

Accepted Answer

A) I and III only 
B) II and IV only 
C) I, II, and III only 
D) II, III, and IV only 
E) I, II, III, and IV 
A) I and III only 
B) II and IV only 
C) I, II, and III only 
D) II, III, and IV only 
E) I, II, III, and IV

Question 16

Which one of the following accounts is least likely to vary directly with the level of sales?

Accepted Answer

A) accounts payable 
B) inventory 
C) cost of goods sold 
D) interest expense 
E) accounts receivable 
A) accounts payable 
B) inventory 
C) cost of goods sold 
D) interest expense 
E) accounts receivable

Question 17

How frequently do corporations file 10K reports with the SEC?

Accepted Answer

A) monthly 
B) quarterly 
C) semi-annually 
D) annually 
E) only when the firm engages in a merger or an acquisition 
A) monthly 
B) quarterly 
C) semi-annually 
D) annually 
E) only when the firm engages in a merger or an acquisition

Question 18

Which one of the following is income realized in cash form?

Accepted Answer

A) net income 
B) revenue 
C) cash flow 
D) retained earnings 
E) dividends 
A) net income 
B) revenue 
C) cash flow 
D) retained earnings 
E) dividends

Question 19

O'Hara's Market has net income of $1.6 million and 525,000 shares of stock outstanding.What is the amount of the dividends per share if the plowback ratio is 60 percent?

Accepted Answer

A) $0.94 
B) $1.07 
C) $1.22 
D) $1.67 
E) $1.98 
A) $0.94 
B) $1.07 
C) $1.22 
D) $1.67 
E) $1.98

Question 20

Which one of the following will increase the investment cash flow?

Accepted Answer

A) purchase of an investment 
B) issuing new shares of stock 
C) repaying a bond issue 
D) sale of a building 
E) payment of interest on a bond issue 
A) purchase of an investment 
B) issuing new shares of stock 
C) repaying a bond issue 
D) sale of a building 
E) payment of interest on a bond issue

Which one of the following is NOT included in operating income?

Whole Wheat Farms,Inc.has a net income of $20,000 and a dividend payout ratio of 30 percent.The firm issued $12,000 worth of common stock during the period.The firm has no long-term debt.What is the financing cash flow for the period?

Which one of the following statements related to book value per share (BVPS)is correct?

Which one of the following is the cash flow resulting from the payment of dividends and the issuance or repurchase of equity securities?

A firm has net income of $22,500 and a book value per share of $3.10.The firm has 30,000 shares of stock outstanding and a price-earnings ratio of 15.9.What is the price-book ratio?

Which one of the following is most apt to be constant given the percentage of sales approach to creating pro forma statements?

A firm has net sales of $35,000,operating expenses of $6,100,depreciation of $1,700,and cost of goods sold of $18,300.What is the gross margin?

Which one of the following provides information on a firm's assets and liabilities as of a particular date?

Which of the following reports are always included in a 10K filing with the SEC? I.statement of cash flows II.balance sheet III.pro-forma statement IV.income statement

What is the investment cash flow?

A decrease in which one of the following will increase the return on assets?

Regulation FD requires companies to do which one of the following when disclosing material non-public information?

Which one of the following is an ownership interest in a firm?

Which of the following affect the earnings per share? I.decrease in interest expense II.share repurchase III.increase in tax rates IV.preferred stock dividend

Which one of the following accounts is least likely to vary directly with the level of sales?

How frequently do corporations file 10K reports with the SEC?

Which one of the following is income realized in cash form?

O'Hara's Market has net income of $1.6 million and 525,000 shares of stock outstanding.What is the amount of the dividends per share if the plowback ratio is 60 percent?

Which one of the following will increase the investment cash flow?

A Brief History of Risk and Return

The Investment Process

Overview of Security Types

Mutual Funds and Other Investment Companies

The Stock Market

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Diversification and Risky Asset Allocation

Return, Risk, and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Corporate and Government Bonds

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters

Exam 17: Projecting Cash Flow and Earnings

Which one of the following is NOT included in operating income?

Whole Wheat Farms,Inc.has a net income of $20,000 and a dividend payout ratio of 30 percent.The firm issued $12,000 worth of common stock during the period.The firm has no long-term debt.What is the financing cash flow for the period?

Which one of the following statements related to book value per share (BVPS)is correct?

Which one of the following is the cash flow resulting from the payment of dividends and the issuance or repurchase of equity securities?

A firm has net income of $22,500 and a book value per share of $3.10.The firm has 30,000 shares of stock outstanding and a price-earnings ratio of 15.9.What is the price-book ratio?

Which one of the following is most apt to be constant given the percentage of sales approach to creating pro forma statements?

A firm has net sales of $35,000,operating expenses of $6,100,depreciation of $1,700,and cost of goods sold of $18,300.What is the gross margin?

Which one of the following provides information on a firm's assets and liabilities as of a particular date?

Which of the following reports are always included in a 10K filing with the SEC? I.statement of cash flows II.balance sheet III.pro-forma statement IV.income statement

What is the investment cash flow?

A decrease in which one of the following will increase the return on assets?

Regulation FD requires companies to do which one of the following when disclosing material non-public information?

Which one of the following is an ownership interest in a firm?

Which of the following affect the earnings per share? I.decrease in interest expense II.share repurchase III.increase in tax rates IV.preferred stock dividend

Which one of the following accounts is least likely to vary directly with the level of sales?

How frequently do corporations file 10K reports with the SEC?

Which one of the following is income realized in cash form?

O'Hara's Market has net income of $1.6 million and 525,000 shares of stock outstanding.What is the amount of the dividends per share if the plowback ratio is 60 percent?

Which one of the following will increase the investment cash flow?

A Brief History of Risk and Return

The Investment Process

Overview of Security Types

Mutual Funds and Other Investment Companies

The Stock Market

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Diversification and Risky Asset Allocation

Return, Risk, and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Corporate and Government Bonds

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters