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FINC400 I004 quiz 3




Question;FINC400 I004 Sum;13;The quiz;is accessible once and is available for the duration of 1.5-hours. Please do;not exit from the quiz unless it has been completed, as it will not be;accessible again.;Question 1 of 25;4.0;Points;A lower price for the firm's product;will reduce the firm's breakeven point.;A.;True;B.;False;uestion;2 of 25;4.0 Points;(point);Profit is generally adequate to finance significant growth.;A.;True;B.;False;Question;5 of 25;4.0 Points;The;degree of combined leverage is the sum of the degree of operating leverage and;the degree of financial leverage.;A.;True;B.;False;Question;6 of 25;4.0 Points;If fixed;costs rise while other variables stay constant;A.the;breakeven point rises.;;of operating leverage increases.;;profit declines.;D.all;of these;Question;7 of 25;4.0 Points;Operating;leverage emphasizes the impact of using fixed assets in the business.;A.;True;B.;False;Question;8 of 25;4.0 Points;(point);In financial statements, the number of units shown in cost of goods sold as compared;to the number of the units actually produced;;higher.;;lower.;;the same.;D.can;be either higher or lower.;Question 9 of 25;4.0;Points;The contribution margin is equal to price per unit minus total;costs per unit.;A.;True;B.;False;Question;10 of 25;4.0 Points;(point);Which of the following is most likely to increase the final number for notes;payable in the pro forma balance sheet?;A.decrease;in inventory.;B.increase;in retained earnings.;C.decrease;in accounts payable.;D.decrease;in accounts receivable.;estion;11 of 25;4.0 Points;An;increase in sales and profits generates the necessary cash required for;economic growth.;A.;True;B.;False;Question 12 of 25;4.0 Points;The;percent-of-sales forecast is likely to be most accurate when used with cyclical;companies.;A.;True;B.;False;Question;13 of 25;4.0 Points;Pro forma;financial statements are;A.the;most comprehensive means of financial forecasting.;B.often;required by prospective creditors.;C.projections;of financial statements for a future period.;D.all;of these.;Question 14 of 25;4.0 Points;(point);When the cost of raw materials is increasing, FIFO accounting;A.yields;higher ending inventory values than LIFO.;B.produces;higher unit sales than using LIFO.;C.yields;higher cost of goods sold than LIFO.;D.All;of these.;Question;15 of 25;4.0 Points;(point);If sales volume exceeds the break-even point, the firm will experience;;operating loss.;;operating profit.;;increase in plant and equipment.;;increase in stock price.;Question;16 of 25;4.0 Points;The value;of ending inventory should be equal to beginning inventory plus total;production costs minus cost of goods sold.;A.;True;B.;False;Question;17 of 25;4.0 Points;(point);Leverage works best when volume is increasing.;A.;True;B.;False;Question;18 of 25;4.0 Points;(point);The percent-of-sales method would be more accurate under a steady sales;assumption than cyclical sales.;A.;True;B.;False;Question;19 of 25;4.0 Points;If the;price per unit decreases because of competition but the cost structure remains;the same;A.the;breakeven point rises.;B.the;degree of combined leverage declines.;C.the;degree of financial leverage declines.;D.All;of these;Question;20 of 25;4.0 Points;Sales (100,000 units);$ 1,000,000;Variable costs;300,000;Contribution;margin;700,000;Fixed manufacturing costs;200,000;Operating income;500,000;Interest;75,000;Earnings before taxes;425,000;Taxes (30%);127,500;Net Income;$ 297,500;Refer to the figure above. The Degree of Operating Leverage is;A.1.40x;B.1.56x;C.3.33x;D.2.22x;Question 21 of 25;4.0 Points;(point);The percent-of-sales method for financial forecasting assumes that balance;sheet accounts maintain a constant relationship to sales.;A.;True;B.;False;Question;22 of 25;4.0 Points;(point);As the contribution margin rises, the breakeven point goes down.;A.;True;B.;False;Question;23 of 25;4.0 Points;(point);In the percent-of-sales method, an increase in dividends;A.will;increase required new funds.;B.will;decrease required new funds.;C.has;no effect on required new funds.;D.more;information is needed.;uestion;24 of 25;4.0 Points;Which of;the following is not true about leverage?;A.operating;leverage influences the top half of the income statement, determining EBIT.;;leverage deals with the bottom half of the income statement, determining EPS;C.combined;leverage utilizes the entire income statement, showing the impact of change;in volume on EBIT.;D.none;of these;Question;25 of 25;4.0 Points;The;finance department should work independently without the input of other;departments because there may be significant biases when creating proformas.;A.;True;B.;False


Paper#51551 | Written in 18-Jul-2015

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