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kaplan mt482 unit 7 quiz




Question;Which of the following ratios best measures the;profitability of a company?;Return on equity;Gross margin;Current ratio;Net operating asset turnover;Question 2. Question;Under the accrual basis of accounting, which of the;following statements is true?;I. Reported net income provides a measure of operating;performance;II. Revenue is recognized when cash is received, and;expenses are recognized when payment is made;III. Cash inflows are recognized when they are received, and;cash outflows are recognized when they are made;I only;III only;CORRECT I and III;I, II and III;Question 3. Question;Compared with firms with capital leases, firms with;operating leases generally report;higher cash flow from operations;lower cash flow from operations;identical cash flow from operations;lower or higher cash flow from operations;depending upon market interest rates;Points Received: 0 of 2;Comments;Question 4. Question;The balance for supplies is $41,000 and $27,000 for 12/31/05;and 12/31/06, respectively. During the 2006, the company recorded $30,500 of;supplies expense was recorded. How much new supplies were purchased?;$44,500;$16,500;$14,000;$30,500;Question 5. Question;Return on operating assets for 2005 is;7.9%;7.41%;8.78%;8.1%;Question 6. Question;Which of the following could cause return on net operating;assets to increase, all;things equal?;A decrease in interest rate on debt;Increase in days accounts receivable are;outstanding;Increase in inventory turnover;Decrease in gross margin;Question 7. Question;Assume all assets are operating assets, all current;liabilities are operating liabilities.;Return on equity for 2005 is;20.41%;19.75%;17.54%;18.12%;Question 8. Question;Below is selected information from Tricrop.;Return on Common Equity for Year 1 is;19.0%;19.60%;21.08%;26.03%;Points Received: 2 of 2;Question 9. Question;Which of the following statements is correct?;Net operating profit margin divided by net;operating asset turnover equals return on net operating assets;Return on net operating assets can be;disaggregated into net operating profit margin and leverage;Return on equity equals return on net;operating assets less interest, net of tax;Return on equity can be disaggregated into net;operating profit margin, net operating asset turnover and leverage;Question 10. Question;Which of the following statements about the equity growth;rate is correct?;I. the higher the ROCE the higher equity growth rate, all;other things equal;II. the higher the dividend payout the higher the equity;growth rate;III. the equity growth rate is unaffected by the cost of;debt;IV. the equity growth rate indicates the expected growth in;stock price each period;I, II, III and IV;I, II and III;I and III;I only


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