A firm with no leases has a long-term debt ratio of 50%. This means that
the book value of equity:
Answer
Selected Answer: equals the book value of long-term debt.
Correct Answer: equals the book value of long-term debt.
Response correct
Feedback:
Question 2
2 out of 2 points
The use of debt in the firm's capital structure will increase ROE if the firm:
Answer
Selected Answer: earns a higher return than the rate paid on
debt.
Correct Answer: earns a higher return than the rate paid on
debt.
Response correct
Feedback:
Question 3
2 out of 2 points
,When Tri-C Corp. compares its ratios to industry averages, it has a higher
current ratio, an average quick ratio, and a low inventory turnover. What
might you assume about Tri-C?
Answer
Selected Answer: Its average inventory is too
high.
Correct Answer: Its average inventory is too
high.
Response correct
Feedback:
Question 4
2 out of 2 points
Calculate the average collection period for Dotte Inc. if its accounts
receivables were $500 and $600 at the end of each of the last two years,
and its revenue over the last year was $3,000:
Answer
Selected Answer: 61 days
Correct Answer: 67 days
Response Average collection period = ((500 +
Feedback: 600)/2)/(3000/365)= 67 days
Question 5
2 out of 2 points
, A high dividend yield indicates:
Answer
Selected Answer: the stock price is relatively high.
Correct Answer: investors require a high rate of return.
Response incorrect
Feedback:
Question 6
2 out of 2 points
TSI Inc. has enough liquid assets to finance its operations for 67 days and
cash, marketable securities, and receivables totaling $1,000. TSI's average
daily expenditures from operations are:
Answer
Selected Answer: $14.93
Correct Answer: $14.93
Response 67 days = 1000/average daily
Feedback: expenditures
Average daily expenditures = $14.93
Question 7
2 out of 2 points
Which of the following may be the best measure of company performance?
Answer
Selected Answer: EVA
Correct Answer: EVA
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