True and False questions - Indicate True or False 1. A negative net present value is acceptable. 2. Sunk costs are relevant past expenditures. 3. The liquidity ratio tests the solvency of the company.
Q: What is the impact of decrease in assets or increase in liabilities resulting in decreases in…
A: when the assets reduces, the profits of the company also tends to fall. there can be no chance of…
Q: Which element of financial performance decreases in economic benefits during the accounting period…
A: Accounting equations are on the basis of the dual aspect concept of accounting. It means that every…
Q: Match (by letter) the following items with the description or example that best fits. Each letter is…
A: Since you have posted a question with multiple sub-parts, we will solve first three sub- parts for…
Q: Current Ratio. What effect would the following actions have on a firm's current ratio? Assume that…
A: The current ratio is a financial metric that measures a company's ability to cover its short-term…
Q: Which of the following statements is TRUE? 1) The purchase of assets increases income and therefore…
A: Base on the given question we have answered the question
Q: 4 com
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Q: n which of the following cases will the business have Net profit ? a. Expenses are less than revenue…
A: Solution: "Expenses are less than revenue" in this case business will have net profit.
Q: Help According to the principle of conservatism, when faced with uncertainty about the value of an…
A: The conservatism principle suggests that a business, should anticipate and record future losses…
Q: If the firm utilizes a cash basis rather than the accrual basis accounting methodology, all else…
A: If the firm utilizes a cash basis rather than the accrual basis accounting methodology, all else…
Q: What is the financial impact on a company when a customer returns a product for a refund?a. Sales…
A: Sales return: It can be defined as an event where customers return the goods previously purchased…
Q: fordable Lawn Care, Inc., provides lawn-mowing services to both commercial and re ljusting entries…
A: Profit margin defines how a company uses its revenue to earn profit.
Q: Factors that reflect the ability of a business to pay its debts and earn a reasonable amount of…
A: Financial ratios refer to the ratios which are calculated by comparing the two figures of the…
Q: Profitability Index is used when: A. projects are not divisible and the company is in capital…
A: Profitability index is quite extensively used in selecting of projects.
Q: A firm has decided to switch from variables? Assume an inflationary environment. Net profit will: OA…
A: The inventory can be valued using various methods as LIFO, FIFO and weighted average method. FIFO…
Q: The quality of a company's earnings is suspect when the company's net income is more than the cash…
A: Cash flow statement comprises of cash inflows and outflows of organisation, through operating,…
Q: Based only on the information above, the most appropriate conclusion is that, over the period FY13…
A: Return on equity is the ratio which shows the earning capacity of the equity shareholders’ funds and…
Q: Which of the following assumptions is embodied in the AFN equation? a. All balance sheet accounts…
A: AFN equation related to the additional fund needed , It is assumed that an increase in sales will…
Q: 50) Which of the following is true of the acid-test ratio? A) It measures a company's ability to pay…
A: The acid-test ratio, also known as the quick ratio, is a financial metric used to assess a company's…
Q: Higher the ratio, the more favorable it is, doesn’t stand true for Select one: a. Net profit…
A: Operating ratio is a company's operating expenses as a percentage of revenue. Higher the operating…
Q: Return on net operating assets ( RNOA = NOPAT/Average NOA) is commonly used to evaluate a companies…
A: Part 1 - Specific ways to reduce the inventory 1) Company can adopt Just in Time (JIT) Method of…
Q: By modifying the break-even equation, a company is able to determine the sales required to earn a…
A: · CVP analysis is used to identify the changes in costs and volume affect a company's…
Q: Multiple Choice Depreciation is a non cash item on the income statement. Generally accepted…
A: Accounting Principles -Accounting principles are the standard operating procedures and rules…
Q: Which of the following IS an example of an accounting-based earnings management (EM) strategy…
A: Accounting-Based Earnings Management: Earnings management is a technique used in accounting to…
Q: III. PROBLEMS. 1. Indicate whether the meaning and and consequences of the following statistical…
A: Ratio analysis is defined as an quantitative technique, which used to gain an insight into the…
Q: Which of the following statements is not correct? Group of answer choices A)Purchasing fixed assets…
A: A)Purchasing fixed assets using cash decreases the current ratio. Purchasing fixed asset using cash…
Q: A company with a higher level of gearing will have: a.A high liabilities/total assets ratio. b.A…
A: Gearing ratio is one of the financial ratio which shows how much total assets of the business are…
Q: political cost hypothesis
A: Political cost hypothesis states that if the political costs are higher, managers use accounting…
Q: The expected value of an accountant's profit and loss analysis is 0. Explain what this means.…
A: Justification A. Since the expected value cannot be less than 0, an expected value of 0 means…
Q: Suppose the current assets of a company decrease over time while all else remains unchanged, then…
A: Meaning of Return on Investment Return on investment (ROI) is performance measure used to evaluate…
Q: Which of the following explains why relative valuation is preferred over intrinsic valuation? a.…
A: Stock valuation: It is the process of analyzing the prices of stock before investing in it. The…
Q: How does the accrual basis of accounting provide different results when compared with the cash…
A: Cash Basis of accounting- Under cash basis, accounting entries are recorded as and when there are…
Q: Which of the following statements is not true about the current ratio? A benchmark of 3.00 to 1.00…
A: According to the given question, we are required to find out the correct answer from the available…
Q: 23 Which element of financial performance decreases in economic benefits during the accounting…
A: Accounting equations are on the basis of the dual aspect concept of accounting. It means that every…
Q: What does the current ratio inform you about a company? A. The efficient use of assets. B. The…
A: Current Ratio : The current ratio is the relation between the current assets and current liabilities…
Q: Required: 1-a. Compute the change in net operating income for the company as a whole if housekeeping…
A: Segmented income statement helps in showing the sales and specific costs associated with different…
Q: What does a high net profit margin of any company demonstrate? a. Company's effectiveness in…
A: Profit maximization is one of the main goals of every business. To increase the profit, there are…
Q: Why is the acid test ratio a more rigorous test of short-term solvency than the current ratio? A.…
A: The ratio refers to the establishment of a relation between the two numbers. In accounting, the…
Q: True or False: All else being equal, a decrease in a company's profit margin will result in an…
A: Return on assets = Net income / Total assets So, if the profit margin decreases then, the return on…
Q: Question 3 Which statement measures and reports the financial results of a company's performance for…
A:
Q: orted profit as a result of the erros
A: Given: To prepare the statement of adjusted working capital and net misstatement of the reported…
Q: A firm's market-to-book ratio might be greater than 1.0 due to accounting reasons. An example of an…
A: Please find the answer to the above question below:
Q: one of the following will decrease net working capital? Select one: a. A decrease in…
A: The gap between a firm's current assets and current liabilities, such as cash, accounts…
Q: Earnings are considered to be of lower quality if O cash flow from operating activities is greater…
A: Hi student Since there are multiple questions, we will answer only first question.
Q: Which of the following statements regarding liabilities is not true? a. Liabilities can be for…
A: The claims creditors have over assets or resources of a company are referred to as liabilities.…
Q: The method of comparators can be applied using the ratio of operating income to revenue as a basis…
A: Operating Income is an accounting number that measures the amount of operating profit for a company…
Q: Indicate the effects of the transactions listed, on current assets, current ratios and net income.…
A: Debit what comes in, Credit what goes out. Debit the receiver, Credit the giver. Debit all expenses…
Q: estion 6 What statement does not report the changes in financial position of the company? income…
A: Changes in financial position of the company means that where changes has been made in assets ,…
Q: Read the following data and answer all the questions below: MRF, the leading automobile tyre…
A: Current ratio (2016)=Current assetsCurrent liabilities=662,835.60472,859.80=1.401759
Do solve asap
True and False questions - Indicate True or False
1. A negative
2. Sunk costs are relevant past expenditures.
3. The
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- 1 When examining the current ratio and looking at the company's liquidity, which of the following ratios would NOT assist with evaluating liquidity? A) inventory turnover B) receivables turnover C) quick ratio D) profit margin2. The objectives of Working Capital management is not to have a proper balance between different components of Working Capital True False 3. Revenue Statement Ratios: Ratios calculated from the different items as appearing in the Profit & Loss True False 4. Working Capital of a business provides a continuous finance for purchasing raw materials and payment of wages and overheads until the cash is brought back into the business by way of sales realization. True False 5. Cash Flow Statement shows provides an appropriate information to the management as regards to the firm's ability to pay the cash dividend to its shareholders. True FalseRevenue Expenditures are Select one: O a. Short-life and must always be replaced to generate revenue for an accounting period O b. Reduces profit O c. All the above O d. Expenses are shown in Income Summary
- I. Explain the tradeoff between the costs of having too much liquidity on the one hand and financial distress and insolvency on the other hand. II. What gives rise to, or causes, each. III. Give an example explaining both.Revenue Expenditures are Select one: a. None of the these b. No direct effect on profit c.Expenses are shown in Balance Sheet d. Short-life and must always be replaced to generate revenue for an accounting periodMultiple Choice Questions 1. The following statements are correct for the Economic Value Added (EVA), except, A. The most conventional way to determine the value of the asset is through its economic value added. B. Economic value Added (EVA) is a convenient metric in evaluating investment as it quickly measures the ability of the firm to support its cost of capital using its earnings C. EVA is the excess of the company’s equity after deducting the cost of capital. D. The general concept here is that higher EVA is better for the firm 2. Ernesto, Inc. has projected average earnings every year of P 100 million. Debt to Equity Ratio is 3:1. After tax cost of debt is 5% while cost of equity is 10%. The Board of directors of the company decided to sell the company for P 1 Billion. Compute for the Economic Value Added. (EVA). A. 5 Million B. P 50 Million C. P 0 D. P 25 Million 3. SPRO Corp is planning to expand and new projects is expected to have an EVA of P200,000. The annual coast of…
- A. Other things being equal, which company appears to have the better liquidity position in terms of their ability to pay short-term debts as they come due as measured by the current ratio?B. Which company appears to offer the better liquidity position in terms of their ability to pay short-term debts as they come due as measured by the acid-test or quick ratio?C. Other things being equal, which company appears to have the better liquidity position in terms of ability of the company’s current liabilities to be covered using its cash and cash equivalents?D. Which company appears to offer the better security for its current obligation creditors as measured by the current liabilities to net worth ratio?LBO Valuation - Normalizing EBITDA The ultimate valuation of a prospective LBO is usually based on normalized EBITDA so it's important to understand potential adjustments to derive normalized EBITDA. Which of the following is not typically considered an adjustment when normalizing EBITDA? Gains/losses on sale of assets A O Personal expenses being expensed to the company Reducing cost of goods sold as the private equity firm will drive costs lower Transaction or professional fees Scroll down for more Next1- In a forecasted balance sheet, notes payable are normally calculated using percentage of sales method.* True False 2- In the forecasted balance sheet, if assets are greater than total liabilities and equity, the company has deficiency in funds True False 3 Operating profit margin is a liquidit
- A1) For a given financial institution, its Income Gap and its Duration Gap always have the opposite sign. True or False A2) Duration Gap helps find the change in a______, whereas Income Gap analysis finds the change in b______. a. expense on liability, b. income from asset b. net worth, b. asset value c. net worth, b. income from assets d. asset value, b. liability value A3) In an interest rate swap, a RSA- financial institution such as the Friendly Finance Company would swap away _a___ in favour of _b___ in a contract. (RSA:r ate sensitive assets, FRA: fixed rate assets) A . RSA, b. FRA B . FRA, b. FRA C . RSA, b. RSA D . FRA. b. RSA A4)An interest rate swap designed to reduce the level of bank interest rate risks also guarantees profits at the same time. True or False A5)An interest rate swap designed to reduce the level of bank interest rate risks involves swapping A)only the underlying principal B)both the income flow and the principal C)none D)only the flow of income on an…Application Directions: On the space provided, write your FIRST NAME if the idea being expressed is CORRECT, and your LAST NAME, if otherwise. 1. When an entity's net working capital is positive, current liabilities exceed current assets. 2. Marketing managers prefer lower inventory quantities since costs are associated with carrying inventories 3. When an entity's net working capital is negative, current liabilities exceed current assets. 4. Entities would prefer to convert inventories to cash the fastest way possible. 5. Working capital management is critical in every organization. 6. At the economic order quantity, carrying costs exceed ordering costs. 7. The higher the firm's current assets, the higher the profitability and the higher the risk. 8. The reorder point is measured as the lead time in order processing multiplied by daily inventory usage. 9. A firm's choice in the level of its working capital reflects its risk preference. 10.A safety stock prevents the occurrence of…