CFIN EXAM QUESTIONS WITH ALL CORRECT ANSWERS
Which ratio is not used in DuPont formula?
A. Debt/equity
B. Net income/sales
C. Sales/assets
D. Assets/equity - Answer- A. Debt/equity
The ratio which many observers use to quantify the stock markets opinion of a firm is the current ratio. - A...
CFIN EXAM QUESTIONS
WITH ALL CORRECT
ANSWERS
Which ratio is not used in DuPont formula?
A. Debt/equity
B. Net income/sales
C. Sales/assets
D. Assets/equity - Answer- A. Debt/equity
The ratio which many observers use to quantify the stock markets opinion of a firm is
the current ratio. - Answer- False
Which of the following is a qualitative factor of the industry?
A. General economic conditions
B. Fixed costs
C. Variable costs
D. All of the above - Answer- D. All of the above
Precise forecasts which may be supported by great detail are useless if they do not
approximate reality. - Answer- True
General economic conditions is a subset of sales influences that impact an industry. -
Answer- True
Which of the following is a qualitative factor of the company?
A. Fixed costs
B. Product users
C. Marketing strategies
D. All of the above - Answer- D. All of the above
Which statement is typically projected first? - Answer- Income statement
Vertical analysis is useful in projecting financial statements because it allows you to
project items relative to a benchmark. - Answer- True
, Qualitative analysis is the first step in the development of pro forma statements. -
Answer- True
One of the qualitative factors that impacts the industry is an industry maturity and profit
trends. - Answer- True
When projected assets are less than projected liabilities and equity the firm will have -
Answer- Excess cash
Surveys produced by Robert Morris Associates are useful in
A. Qualitative analysis
B. Quantitative analysis
C. Neither a nor b - Answer- C. Neither a nor b
Management has two methods by which it can add value to the firm through
components on either side of the accounting equality. - Answer- True
Compounding is the opposite of discounting. - Answer- True
Which decreases the present value? - Answer- Increasing discount rate
Lily Jones places $10,000 in a savings account that compounds interest at 4%. How
much will she have in 5 years? - Answer- $12,167
Bruce Sterling places $5,000 in a savings account that compounds interest at 8%. How
much money will Bruce have in 10 years? - Answer- $10,795
Jake Cherson is saving for a new tractor that costs $60,000. Approximately how much
money must be set aside now to have $60,000 in 5 years if the annual compound
interest rate is 10%? - Answer- $37,254
A major tenet of finance is to match short-term assets with short-term borrowings and
long-term assets with long-term borrowings. - Answer- True
By selecting the proportions of debt and equity in the most efficient way, a manager can
add value to the firm. - Answer- True
In calculating the present value, the rate of return that an individual is certain can be
achieved may be used as a discount factor. - Answer- True
An increase in risk should carry with it an increase in return. - Answer- True
Which discounted cash flow technique matches the present value with the future value
so that the net result is zero? - Answer- IRR (internal rate of return)
The ITC in capital budgeting analysis is
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