A corporation is a business that is legally separate and distinct from its owners - ✔ ✔ true
A new venture usually begins its sales forecast by first - ✔ ✔ forecasting industry sales and
expressing the venture's sales as a percent of industry sales
A partnership is owned by two or more individuals - ✔ ✔ true
A trademark must be novel in order to receive protection - ✔ ✔ false
A typical business plan includes all of the following sections except - ✔ ✔ initial public offering
information
A venture's cash conversion cycle will decrease if the purchase-to-payment conversion period increases.
- ✔ ✔ true
A venture's common equity account increased by $100,000 the past year and ended the year at
$500,000. What was its sustainable sales growth rate? - ✔ ✔ 25%
A venture's common equity was $50,000 at the end of last year. If the venture's common equity at the
end of this year was $60,000 what was its sustainable sales growth rate? - ✔ ✔ 20%
A venture's operating cycle measures the time it takes to: - ✔ ✔ purchase raw materials, assemble a
product, book the sale, and collect on the sale
Accrued expenses are expenses that have been incurred and paid. - ✔ ✔ false
Accrued revenue is shown on a balance sheet as _______ - ✔ ✔ an asset
Based on the following information, determine the average receivables (rounded to thousands of
dollars) that were outstanding: net sales = $575,000; sale-to-cash conversion period = 57.1 days;
purchase-to-payment conversion period = 76.8 days; and cost of goods sold = $380,000. - ✔ ✔
$90,000
Based on the following information, determine the ventures cash conversion cycle: inventory-to-scale
conversion period = 112.9 days; sale-to-cash conversion period = 57.1 days; and purchase-to-payment
conversion period = 76.8 days - ✔ ✔ 93.2 days
Benjamin Corporation began its operations on September 1 of the current year. Budgeted sales for the
first three months of business are $250,000, $300,000, and $420,000, respectively, for September,
October, and November. The company expects to sell 20% of its merchandise for cash. Of sales on
, account, 70% are expected to be collected in the month of the sale, 25% in the month following the sale,
and the remainder in the following month.
The cash collections from accounts receivable in September are _____. - ✔ ✔ $140,000
Brite Inc. had the following assets and Liabilities at the end of the year:
Assets $54,800
Liabilities $32,000
What is the year-end stockholders' equity for Brite Inc - ✔ ✔ $22,800
Calculate the after-tax WACC based on the following information: nominal interest rate on debt = 12%;
cost of common equity = 25%; common equity = $700,000; interest-bearing debt = $300,000; and tax
rate = 25%. - ✔ ✔ 20.2%
Calculate the weighted average cost of capital (WACC) based on the following information; the capital
structure weights are 50% debt and 50% equity; the interest rate on debt is 10%; the required return on
equity holders is 20%; and the tax rate is 30% - ✔ ✔ 13.5%
During the most recent year, Banigo corporation experience an increase in total assets of $72,600 and
an increase in total liabilities of $40,900. Assuming that capital stock increased by $5,000 and no
dividends were paid, calculate Banigo's net income or net loss for the end of the year - ✔ ✔ Net
income of $26,700
Financial causes, such as excessive debt and insufficient financial capital, are not major contributors to
business failures. - ✔ ✔ False
Following is financial statement information for Rogex Corporation: net sales = $2,768; cost of goods
sold = $1,210; depreciation = $360; interest expense = $160; taxes = $312; addition to retained earnings
= $508; and dividends paid = $218. What is the operating profit margin for Rogex? - ✔ ✔ 43.3%
If beginning-of-period common equity is $200,000 and end-of-period common equity is $300,000 the
sustainable growth rate is - ✔ ✔ 50%
If the expected sales volume for the current period is 25,000 units, the desired ending inventory is 700
units, and the beginning inventory is 450 units, the number of units set forth in the production budget,
representing total production for the current period, is _____. - ✔ ✔ 25,250 units
If there are no beginning retained earnings, net income of $30,300, and ending retained earnings of
$8,000, how much are dividends? - ✔ ✔ $22,300
In preparing flexible budgets, the first step is to identify the fixed and variable components of the
various costs and expenses being budgeted - ✔ ✔ False
