FIN 315 FIN315 Exam 2 Answers (UNC Greensboro)

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FIN 315 FIN315 Exam 2 Answers (UNC Greensboro)

FIN 315 FIN315 Exam 2 Answers (UNC Greensboro)

Question 1

5 / 5 pts

Accounting practices and procedures used to prepare financial statements are called ________.

  

IRB

 

  

IFRS

 

  

SEC

 

  

GAAP

 

 

Question 2

5 / 5 pts

The 2002 law that established the Public Company Accounting Oversight Board (PCAOB) was called ________.

  

the Sarbanes-Oxley Act

 

  

the Harkins-Oxley Act

 

  

the McCain-Feingold Act

 

  

the Sarbanes-Harkins Act

 

 

Question 3

5 / 5 pts

Total assets less net fixed assets equals ________.

  

depreciation

 

  

liabilities and equity

 

  

gross assets

 

  

current assets

 

 

Question 4

5 / 5 pts

A(n) ________ provides a financial summary of a firm's operating results during a specified period.

  

balance sheet

 

  

statement of retained earnings

 

  

income statement

 

  

statement of cash flows

 

 

IncorrectQuestion 5

0 / 5 pts

Operating profit is ________.

  

sales revenue minus depreciation expense

 

  

sales revenue minus cost of goods sold

 

  

earnings before depreciation and taxes

 

  

gross profit minus operating expenses

 

 

Question 6

5 / 5 pts

The net value of fixed assets is also called its ________.

  

book value

 

  

par value

 

  

market value

 

  

intrinsic value

 

 

Question 7

5 / 5 pts

Retained earnings on the balance sheet represents the ________.

  

cumulative total of all earnings reinvested in the firm

 

 

amount of proceeds in excess of the par value received from the original sale of common stock

  

net profit after taxes

 

  

net profit after taxes minus preferred dividends

 

 

Question 8

5 / 5 pts

Paid-in capital in excess of par represents the amount of proceeds ________.

 

in excess of the par value from the original sale of common stock

 

in excess of the par value from the current value of common stock

 

in deficit of the par value from the original sale of common stock

 

in excess of the par value from the intrinsic value of common stock

 

IncorrectQuestion 9

0 / 5 pts

Firm ABC had operating profits of $100,000, taxes of $17,000, interest expense of $34,000, and preferred dividends of $5,000. What was the firm's net profit after taxes?

  

$49,000

 

  

$66,000

 

  

$44,000

 

  

$83,000

 

 

Question 10

5 / 5 pts

Candy Corporation had pretax profits of $1.2 million, an average tax rate of 34 percent, and it paid preferred stock dividends of $50,000. There were 100,000 shares outstanding and no interest expense. What was Candy Corporation's earnings per share?

  

$3.91

 

  

$7.42

 

  

$7.59

 

  

$4.52

 

 

Question 11

5 / 5 pts

A firm's year-end retained earnings balances are $670,000 and $560,000, for 2014 and 2015 respectively. The firm paid $10,000 in dividends in 2015. The firm's net profit after taxes in 2015 was ________.

  

-$100,000

 

  

$100,000

 

  

-$110,000

 

  

$110,000

 

 

Question 12

5 / 5 pts

A firm has a year-end retained earnings balance of $220,000 for 2014. The firm reported net profits after taxes of $50,000 and paid dividends of $30,000 in 2015. The firm's retained earnings balance at 2015 year end is ________.

  

$270,000

 

  

$240,000

 

  

$300,000

 

  

$250,000

 

 

Question 13

5 / 5 pts

Ratios provide a/an ________ measure of a company's performance and condition.

  

absolute

 

  

definitive

 

  

relative

 

  

gross

 

 

Question 14

5 / 5 pts

The ________ ratios are primarily used as measures of return.

  

activity

 

  

profitability

 

  

liquidity

 

  

debt

 

 

Question 15

5 / 5 pts

________ ratios are a measure of the speed with which various accounts are converted into sales or cash.

  

Activity

 

  

Liquidity

 

  

Profitability

 

  

Debt

 

 

Question 16

5 / 5 pts

The ________ ratio indicates the efficiency with which a firm uses its assets to generate sales.

  

inventory turnover

 

  

total asset turnover

 

  

current asset turnover

 

  

quick

 

 

Question 17

5 / 5 pts

NICO Corporation had net fixed assets of $2,000,000 at the end of 2015 and $1,800,000 at the end of 2014. In addition, the firm had a depreciation expense of $200,000 during 2015 and $180,000 during 2014. Using this information, NICO's net fixed asset investment for 2015 was ________.

  

$20,000

 

  

$400,000

 

  

$0

 

  

$380,000

 

 

Question 18

5 / 5 pts

During 2015, NICO Corporation had EBIT of $100,000, a change in net fixed assets of $400,000, an increase in net current assets of $100,000, an increase in spontaneous current liabilities of $400,000, a depreciation expense of $50,000, and a tax rate of 30%. Based on this information, NICO's free cash flow is ________.

  

$650,000

 

  

-$30,000

 

  

-$630,000

 

  

-$50,000

 

 

Question 19

5 / 5 pts

Calculate a firm's free cash flow if it has net operating profit after taxes of $60,000, depreciation expense of $10,000, net fixed asset investment requirement of $40,000, a net current asset requirement of $30,000 and a tax rate of 30%.

  

$0

 

  

$30,000

 

  

$60,000

 

  

-$30,000

 

 

Question 20

5 / 5 pts

Which of the following is a cash flow from financing activities?

  

decrease in accounts payable

 

  

increase in accounts payable

 

  

repurchasing stock

 

  

purchasing a long-term asset