Q: Buffett seeks to invest in companies that Select one: a. Have little or no long-term debt Ob. Have a lot of long-term debt but no short-term debt O. Agressively borrow on a short term basis d. Have long-term debt that is nearing maturity Q: Buffett makes the following statement about long-term investments: Select one: a. They do not tell investors anything about the mind-set of management O b. They may include assets that are carried on the books at less than market value . Businesses who make the must acquisitions are the must successful d. They are included in the current asset section of the balance sheet

Q: Buffett seeks to invest in companies that Select one: a. Have little or no long-term debt Ob. Have a lot of long-term debt but no short-term debt O. Agressively borrow on a short term basis d. Have long-term debt that is nearing maturity Q: Buffett makes the following statement about long-term investments: Select one: a. They do not tell investors anything about the mind-set of management O b. They may include assets that are carried on the books at less than market value . Businesses who make the must acquisitions are the must successful d. They are included in the current asset section of the balance sheet

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter1: Role Of Accounting In Society

Section: Chapter Questions

Problem 12MC: Stockholders can best be defined as which of the following? A. investors who lend money to a...

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When a profitable business has no mandated loan capital but there are non-mandated liabilities a. the return on equity always exceeds the return on total capitalb. the return on equity always equals the return on total capitalc. the return on equity may be equal to the return on total capitald. the return on equity always lags behind the return on total capital choose one
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Manny Delgado is interviewing with the Bank of MF for a financial analyst position. The interviewer is interested in knowing whether he understands the EV-to-EBITDA multiple. Delgado explains that the enterprise value is determined by the market value of equity and total debt. He also points out an alternative measure of the enterprise value which considers the free cash flow to the firm. Delgado suggests that we need to subtract the investments on working capital and PPE when calculating the free cash flow to the firm. He further explains the reason we do so is due to the interest tax shield that the investments on working capital and PPE would create. Therefore, by excluding the investments on working capital and PPE, the EV[1]to-EBITDA ratio is not affected by the interest tax shield and is a consistently-defined ratio. Q: Is Delgado’s suggestion on the reason that the investment on working capital and PPE are excluded justifiable? Why?