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FINANCE 3150 BUSINESS FINANCE FALL 2024 CHAPTER 3 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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FINANCE 3150 BUSINESS FINANCE FALL 2024 CHAPTER 3 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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FINANCE 3150 BUSINESS FINANCE FALL2024 CHAPTER 3 QUESTIONS AND
ANSWERS WITH SOLUTIONS 2024
A quick ratio that is much smaller than the current ratio reflects:
A.
a large portion of current assets is in inventory.
B.
that the firm will have a high return on assets.
C.
that the firm will have a high inventory turnover.
D.
a small portion of current assets is in inventory - ANSWER A.
a large portion of current assets is in inventory.
The Bubba Corp. had earnings before taxes of $400,000 and sales of $2,000,000. If it is in the 40% tax
bracket, its after-tax profit margin is:
A.
12%.
B.
25%.
C.
40%.
D.
20%. - ANSWER A.
12%.
In addition to comparison with industry ratios, it is also helpful to analyze ratios using:
A.
only industry ratios provide valid comparisons.
B.
historical data
C.
future projections
D.
trend analysis and historical comparisons - ANSWER D.
trend analysis and historical comparisons
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