Intro to Finance Chap 2 Quiz

Which one of the following statements concerning net working capital is correct? A decrease in the cash balance may or may not decrease net working capital
The _______ tax rate is equal to total taxes divided by total taxable income. average
The cash flow related to interest payments less any net new borrowing is called the: cash flow to creditors
A firm has common stock of {cs}, paid-in surplus of {pds}, total liabilities of 2703. current assets of 314, and fixed assets of 36367. What is the amount of the shareholder’s equity? 33978.00
The percentage of the next dollar you earn that must be paid in taxes is referred to as the _____ tax rate. marginal
Which one of the following must be true if a firm had a negative cash flow from assets? The firm utilized outside funding
Which one of the following statements concerning net working capital is correct? Net working capital increases when inventory is sold for cash at a profit
Which term relates to the cash flow which results from a firm’s ongoing, normal business activities? operating cash flow
A firm has 712 in inventory, 601 in fixed assets, 1230 in accounts receivables, 567 in accounts payable, and 1849 in cash. What is the amount of the current assets? 3791
Noncash items refer to: expenses which do not directly affect cash flow
Four years ago, Velvet Purses purchased a mailing machine at a cost of $184956. This equipment is currently valued at $82537 on today’s balance sheet but could actually be sold for $2306. This is the only fixed asset the firm owns. Net working capital is $38116. and long term debt is $57273. What is the book value of shareholder’s equity? 63380.00
Which one of the following is the financial statement that shows the accounting value of a firm’s equity as of a particular date? balance sheet
A firm has 944 in inventory, 277 in fixed assets, 3763 in accounts receivable, 831 in accounts payable, and 100 in cash. What is the amount of the current assets? 4807
Net working capital is defined as: current assets minus current liabilities
The book value of a firm is: based on historical cost
Depreciation: reduces both taxes and net income
Which one of the following is classified as an intangible fixed asset? trademark
A firm has net working capital of 3789. Long-term debt is 9863, total assets are 983, and fixed assets are 3693. What is the amount of the total liabilities? 3364.00
Which one of these is most apt to be a fixed cost? office salaries
Which one of the following will increase the value of a firm’s net working capital? selling inventory at a profit

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