BFIN Final Exam |Questions with Correct Answers Already Passed
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Course
BFIN
Institution
BFIN
Accounting policies: - will influence the recorded values on the balance sheet
The cash flow statement contains information on the firm's - liquidity, management
of financing and investment activities
Amortization represents an attempt to: - allocate the initial cost of an asset over its
useful...
BFIN Final Exam |Questions with
Correct Answers Already Passed
Accounting policies: - ✔will influence the recorded values on the balance sheet
The cash flow statement contains information on the firm's - ✔liquidity, management
of financing and investment activities
Amortization represents an attempt to: - ✔allocate the initial cost of an asset over its
useful life
Free cash flow is equal to cash flow from operating activities minus: - ✔capital expenditures
and dividends
Cash demands and funding are examined by the way of: - ✔operating, investing and
financing activities
IFRS requires public to report assets at: - ✔market value
IFRS oversees the accounting standards for: - ✔publically traded companies
For private companies, the application of accounting rules under IFRS is: - ✔optional
Double taxation means - ✔shareholders pay both personal taxes and corporate taxes
,Joey's Tasty Chicken has $200,000 earnings before taxes. Assuming a tax rate of 30%. What
is the after-tax income? - ✔$140,00
All of the following are decisions heavily impacted by federal income tax considerations except:
- ✔cash budgeting and dividend policy decisions
Two firms have the same earnings before interest and taxes of $400,000 and both have a tax
rate of 40%. Firm A has $10,000 interest expense whereas firm B has no interest expense. The
two firms' earnings after tax (EAT) are: - ✔The difference in EAT is smaller than that of
interest expense due to the tax reduction on interest expense
A firm with a 40% tax rate is indifferent between paying $100,000 in interest and $60,000
in common stock dividends because: - ✔the aftertax interest expense equals the dividend
payment of $60,000.
The ability of a firm to pay off short-term obligations as they come due is indicated by:
- ✔liquidity ratios
The following are debt utilization ratios with the exception of: - ✔debt to sales
A firm that has a total asset turnover of 1.8: - ✔requires $1 in assets to produce 1$1.80 8
in sales
debt utilization ratios measure: - ✔the debt position of the firm in light of its assets
and earning power
Employing the DuPont system, the ROA is determined by: - ✔multiplying the net profit
margin by the asset turnover
, Key elements that are incorporated in DuPont analysis all of the following except: -
✔contribution margin
The equity multiplier is determined by: - ✔total assets and equity
the DuPont system suggest that a good return on assets requires the following - ✔the
combination of the profit margin and the asset turnover stays high
When calculating ratios or analysis, distortions may occur because of all the following except:
- ✔prime rate changes
An accounts receivable turnover of 12 compared with an industry average of 11 demonstrates
that: - ✔the firm is more efficient in management than an average firm in the industry
An inventory turnover of 8 times per year comparing with industry average of 9 times may
suggest that: - ✔the firm is less efficient in inventory management, and potentially has
too much inventory on hand
Analyzing the financial condition of a firm over time is called: - ✔trend analysis
a firm with a good profit margin: - ✔may be below average in ROA when compared
to industry trends
The common-size financial statements - ✔Express the items on the balance sheet as a
percentage of total assets and items of the income statement as a percentage of total sales
A firm has a profit margin of 5% this year and 4% last year; while the industry average is 4%
this year and 5% last year suggests: - ✔the trend that the profitability of the firm has
improved when compared with industry average
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