Question_testbank_12Dec

Question
	1. Ratio analysis involves a comparison of the relationships between
financial statement accounts so as to analyze the financial position
and strength of a firm.
a. True
b. False
2. The current ratio and inventory turnover ratio measure the liquidity of
a firm. The current ratio measures the relationship of a firm's
current assets to its current liabilities and the inventory turnover
ratio measures how rapidly a firm turns its inventory back into
a "quick" asset or cash.
a. True
b. False
3. If a firm has high current and quick ratios, this is always a good
indication that a firm is managing its liquidity position well.
a. True
b. False
4. The inventory turnover ratio and days sales outstanding (DSO) are two
ratios that can be used to assess how effectively the firm is managing
its assets in consideration of current and projected operating levels.
a. True
b. False
5. A decline in the inventory turnover ratio suggests that the firm's
liquidity position is improving.
a. True
b. False
6. The degree to which the managers of a firm attempt to magnify the
returns to owners' capital through the use of financial leverage is
captured in debt management ratios.
a. True
b. False
7. The times-interest-earned ratio is one indication of a firm's ability
to meet both long-term and short-term obligations.
a. True
b. False
8. Profitability ratios show the combined effects of liquidity, asset
management, and debt management on operations.
a. True
b. False
9. Since ROA measures the firm's effective utilization of assets (without
considering how these assets are financed), two firms with the same
EBIT must have the same ROA.
a. True
b. False
10. Market value ratios provide management with a current assessment of how
investors in the market view the firm's past performance and future
prospects.
a. True
b. False
11. Determining whether a firm's financial position is improving or
deteriorating requires analysis of more than one set of financial
statements. Trend analysis is one method of measuring a firm's
performance over time.
a. True
b. False
Medium:
12. If the current ratio of Firm A is greater than the current ratio of
Firm B, we cannot be sure that the quick ratio of Firm A is greater
than that of Firm B. However, if the quick ratio of Firm A exceeds
that of Firm B, we can be assured that Firm A's current ratio also
exceeds B's current ratio.
a. True
b. False
13. The inventory turnover and current ratios are related. The combination
of a high current ratio and a low inventory turnover ratio relative to
the industry norm might indicate that the firm is maintaining too high
an inventory level or that part of the inventory is obsolete or damaged.
a. True
b. False
14. We can use the fixed assets turnover ratio to legitimately compare
firms in different industries as long as all the firms being compared
are using the same proportion of fixed assets to total assets.
a. True
b. False
15. Suppose two firms have the same amount of assets, pay the same interest
rate on their debt, have the same basic earning power (BEP), and have
the same tax rate. However, one firm has a higher debt ratio. If BEP
is greater than the interest rate on debt, the firm with the higher
debt ratio will also have a higher rate of return on common equity.
a. True
b. False
16. If the equity multiplier is 2.0, the debt ratio must be 0.5.
a. True
b. False
17. Suppose a firm wants to maintain a specific TIE ratio. If the firm
knows the level of its debt, the interest rate it will pay on that
debt, and the applicable tax rate, the firm can then calculate the
earnings level required to maintain its target TIE ratio.
a. True
b. False
18. If sales decrease and financial leverage increases, we can say with
certainty that the profit margin on sales will decrease.
a. True
b. False
Multiple Choice: Conceptual
19. Other things held constant, which of the following will not affect the
current ratio, assuming an initial current ratio greater than 1.0?
a. Fixed assets are sold for cash.
b. Long-term debt is issued to pay off current liabilities.
c. Accounts receivable are collected.
d. Cash is used to pay off accounts payable.
e. A bank loan is obtained, and the proceeds are credited to the firm's
checking account.
20. Other things held constant, which of the following will not affect the
quick ratio? (Assume that current assets equal current liabilities.)
a. Fixed assets are sold for cash.
b. Cash is used to purchase inventories.
c. Cash is used to pay off accounts payable.
d. Accounts receivable are collected.
e. Long-term debt is issued to pay off a short-term bank loan.
Answer: a
21. Company J and Company K each recently reported the same earnings per
share (EPS). Company J’s stock, however, trades at a higher price.
Which of the following statements is most correct?
a. Company J must have a higher P/E ratio.
b. Company J must have a higher market to book ratio.
c. Company J must be riskier.
d. Company J must have fewer growth opportunities.
e. All of the statements above are correct.
22. Stennett Corp.'s CFO has proposed that the company issue new debt and
use the proceeds to buy back common stock. Which of the following are
likely to occur if this proposal is adopted? (Assume that the proposal
would have no effect on the company's operating earnings.)
a. Return on assets (ROA) will decline.
b. The times interest earned ratio (TIE) will increase.
c. Taxes paid will decline.
d. None of the statements above is correct.
e. Statements a and c are correct.
Medium:
23. Which of the following statements is most correct?
a. If a company increases its current liabilities by $1,000 and
b. If a company increases its current liabilities by $1,000 and
simultaneously increases its inventories by $1,000, its current
ratio must rise.
simultaneously increases its inventories by $1,000, its quick ratio
must fall.
c. A company’s quick ratio may never exceed its current ratio.
d. Answers b and c are correct.
e. None of the answers above is correct.
24. Which of the following actions can a firm take to increase its current
ratio?
a. Issue short-term debt and use the proceeds to buy back long-term
b. Reduce the company’s days sales outstanding to the industry average
c. Use cash to purchase additional inventory.
d. Statements a and b are correct.
e. None of the statements above is correct.
debt with a maturity of more than one year.
and use the resulting cash savings to purchase plant and equipment.
25. Which of the following actions will cause an increase in the quick
ratio in the short run?
a. $1,000 worth of inventory is sold, and an account receivable is
b. A small subsidiary which was acquired for $100,000 two years ago and
created. The receivable exceeds the inventory by the amount of
profit on the sale, which is added to retained earnings.
which was generating profits at the rate of 10 percent is sold for
$100,000 cash. (Average company profits are 15 percent of assets.)
c. Marketable securities are sold at cost.
d. All of the answers above.
e. Answers a and b above.
26. As a short-term creditor concerned with a company's ability to meet its
financial obligation to you, which one of the following combinations of
ratios would you most likely prefer?
 Current Debt
 ratio TIE ratio
a. 0.5 0.5 0.33
b. 1.0 1.0 0.50
c. 1.5 1.5 0.50
d. 2.0 1.0 0.67
e. 2.5 0.5 0.71
27. Which of the following statements is most correct?
a. If two firms pay the same interest rate on their debt and have the
b. One of the problems of ratio analysis is that the relationships are
c. Generally, firms with high profit margins have high asset turnover
same rate of return on assets, and if that ROA is positive, the firm
with the hi
gher debt ratio will also have a higher rate of return on
common equity.
subject to manipulation. For example, we know that if we use some
of our cash to pay off some of our current liabilities, the current
ratio will always increase, especially if the current ratio is weak
initially.
ratios, and firms with low profit margins have low turnover ratios;
this result is exactly as predicted by the extended Du Pont equation.
d. All of the statements above are correct.
e. None of the statements above is correct.
28. Which of the following statements is most correct?
a. An increase in a firm's debt ratio, with no changes in its sales and
b. An increase in the DSO, other things held constant, would generally
operating costs, could be expected to lower its profit margin on
sales.
lead to an increase in the total asset turnover ratio.
c. An increase in the DSO, other things held constant, would generally
d. In a competitive economy, where all firms earn similar returns on
e. It is more important to adjust the Debt/Assets ratio than the
lead to an increase in the ROE.
equity, one would expect to find lower profit margins for airlines,
which require a lot of fixed assets relative to sales, than for
fresh fish markets.
inventory turnover ratio to account for seasonal fluctuations.
29. Company A is financed with 90 percent debt, whereas Company B, which
has the same amount of total assets, is financed entirely with equity.
Both companies have a marginal tax rate of 35 percent. Which of the
following statements is most correct?
a. If the two companies have the same basic earning power (BEP),
b. If the two companies have the same return on assets, Company B will
c. If the two companies have the same level of sales and basic earning
d. All of the answers above are correct.
e. None of the answers above is correct.
Company B will have a higher return on assets.
have a higher return on equity.
power (BEP), Company B will have a lower profit margin.
30. A firm is considering actions which will raise its debt ratio. It is
anticipated that these actions will have no effect on sales, operating
income, or on the firm’s total assets. If the firm does increase its
debt ratio, which of the following will occur?
a. Return on assets will increase.
b. Basic earning power will decrease.
c. Times interest earned will increase.
d. Profit margin will decrease.
e. Total assets turnover will increase.
31. Reeves Corporation forecasts that its operating income (EBIT) and total
assets will remain the same as last year, but that the company’s debt
ratio will increase this year. What can you conclude about the
company’s financial ratios? (Assume that there will be no change in
the company’s tax rate.)
a. The company’s basic earning power (BEP) will fall.
b. The company’s return on assets (ROA) will fall.
c. The company’s equity multiplier (EM) will increase.
d. All of the answers above are correct.
e. Answers b and c are correct.
32. Which of the following statements is most correct?
a. If two companies have the same return on equity, they should have
b. If Company A has a higher profit margin and higher total assets
the same stock price.
turnover relative to Company B, then Company A must have a higher
return on assets.
the same times interest earned (TIE) ratio.
c. If Company A and Company B have the same debt ratio, they must have
d. Answers b and c are correct.
e. None of the answers above is correct.
33. Which of the following statements is most correct?
a. If a firm’s ROE and ROA are the same, this implies that the firm is
financed entirely with common equity. (That is, common equity =
total assets).
b. If a firm has no lease payments or sinking fund payments, its times-interest-earned (TIE) ratio and fixed charge coverage ratios must be
c. If Firm A has a higher market to book ratio than Firm B, then Firm A
d. All of the statements above are correct.
e. Answers a and b are correct.
the same.
must also have a higher price earnings ratio (P/E).
34. Which of the following statements is most correct?
a. If Firms A and B have the same level of earnings per share, and the
b. Firms A and B have the same level of net income, taxes paid, and
c. Firms A and B have the same level of net income. If Firm A has a
same market to book ratio, they must have the same price earnings
ratio.
total assets. If Firm A has a higher interest expense, its basic
earnings power ratio (BEP) must be greater than that of Firm B.
higher interest expense, its return on equity (ROE) must be greater
than that of Firm B.
d. All of the answers above are correct.
e. None of the answers above is correct.
Tough:
35. Which of the following statements is most correct?
a. If Company A has a higher debt ratio than Company B, then we can be
b. Suppose two companies have identical operations in terms of sales,
c. The ROE of any company which is earning positive profits and which
sure that A will have a lower times-interest-earned ratio than B.
cost of goods sold, interest rate on debt, and assets. However,
Company A uses more debt than Company B; that is, Company A has a
higher debt ratio. Under these conditions, we would expect B's
profit margin to be higher than A's.
has a positive net worth (or common equity) must exceed the
company's ROA.
d. Statements a, b, and c are true.
e. Statements a, b, and c are false.

36. You are an analyst following two companies, Company X and Company Y.
You have collected the following information:
• The two companies have the same total assets.
• Company X has a higher total assets turnover than Company Y.
• Company X has a higher profit margin than Company Y.
• Company Y has a higher inventory turnover ratio than Company X.
• Company Y has a higher current ratio than Company X.
Which of the following statements is most correct?
a. Company X must have a higher net income.
b. Company X must have a higher ROE.
c. Company Y must have a higher quick ratio.
d. Statements a and b are correct.
e. Statements a and c are correct.

37. You have collected the following information regarding Companies C and
D:
• The two companies have the same total assets.
• The two companies have the same operating income (EBIT).
• The two companies have the same tax rate.
• Company C has a higher debt ratio and a higher interest expense than
• Company C has a lower profit margin than Company D.
Based on this information, which of the following statements is most
correct?
a. Company C must have a higher level of sales.
b. Company C must have a lower ROE.
c. Company C must have a higher times-interest-earned (TIE) ratio.
Company D.
d. Company C must have a lower ROA.
e. Company C must have a higher basic earning power (BEP) ratio.
38. Blair Company has $5 million in total assets. The company’s assets are
financed with $1 million of debt, and $4 million of common equity. The
company’s income statement is summarized below:
The company wants to increase its assets by $1 million, and it plans to
finance this increase by issuing $1 million in new debt. This action
will double the company’s interest expense, but its operating income
will remain at 20 percent of its total assets, and its average tax rate
will remain at 40 percent. If the company takes this action, which of
the following will occur:
a. The company’s net income will increase.
b. The company’s return on assets will fall.
c. The company’s return on equity will remain the same.
d. Statements a and b are correct.
e. All of the answers above are correct.
Multiple Choice: Problems
39. Russell Securities has $100 million in total assets and its corporate
tax rate is 40 percent. The company recently reported that its basic
earning power (BEP) ratio was 15 percent and that its
 return on assets
(ROA) was 9 percent. What was the company’s interest expense?
a. $ 0
b. $ 2,000,000
c. $ 6,000,000
d. $15,000,000
e. $18,000,000
40. A firm has a profit margin of 15 percent on sales of $20,000,000. If
the firm has debt of $7,500,000, total assets of $22,500,000, and an
after-tax interest cost on total debt of 5 percent, what is the firm's
ROA?
a. 8.4%
b. 10.9%
c. 12.0%
d. 13.3%
e. 15.1%	

general business data bank

Question
	
76. In the study of three ethnic groups, what happened to
relations with parents as peer relations increased in importance during early
adolescence?

a. Family members continued to be the
most central source of love and emotional support.

b. Parents decreased in importance as
peer relations provided more closeness.

c. Adolescents
spent more time at home in interaction with their parents after school and on
weekends.

d. Family members were only important
for those adolescents who did not have close friends.













77. As adolescents go through puberty,
conflicts with parents  .

a. are about basic values

b. increase

c. decrease

d. are started by the father



78. Mild, periodic conflicts between
adolescents and their parents reflect which of the following?

a. adolescent stubbornness as a result
of hormone changes

b. parental rigidity as a result of
age

c. the influence of friends’ pressures

d. a changing balance of power in the
family



79. Which of the following was observed in research that
examined the influence of parenting practices on peer group membership? 

a. Parents who ignore their children
have children who stay at home more.

b. Parents who emphasize academic
achievement have children who belong to the "popular" crowd.

c. Parents
who love and support their children have children who bring their friends back
to the house after school.

d. Parents
who do little to involve their children in decision-making have children who
are socially rejected.



80. Which of the following is one of the important new aspects
of peer relationships that occurs in early adolescence? 

a. sexual interest

b. shared activities

c. best friend relationships

d. the formulation of a social
contract

81. For young people, the transition to sexualized
relationships including learning the art of flirtation, practicing how to
approach, and learning the rules of engagement between the sexes is influenced
by __________.

a. reading “how to” books

b. what they learn in the classroom

c. the norms of the peer group and the
community

d. innate reflexes that become
manifest at puberty



82. Which of the following is NOT one of the needs of an adolescent that is met by romantic
relationships?

a. affiliation

b. power

c. attachment

d. sexual
gratification



83. In the transition to sexuality in the United States, the
historical trend has been toward which of the following?

a. earlier involvement in sexual intercourse
for boys and later involvement for girls

b. earlier involvement in sexual
intercourse for boys and girls

c. later involvement in sexual
intercourse for boys and girls

d. earlier involvement in sexual
intercourse for girls and later involvement for boys







84. According to the model developed by Udry and Billy, the
three dimensions that contribute to the transition to sexual intercourse in
adolescence are _______________, ______________, and ________________. 

a. motivation; impulse; drive

b. motivation; social control;
attractiveness

c. social control; social norms;
social roles

d. attractiveness; popularity;
opportunity



85. Ann is an adolescent girl whose boyfriend wants to have
sexual intercourse with her. Her decision about whether to do this is closely
related to  .


a. her physical attractiveness

b. her hormone levels

c. her parents values and the norms of
her peer group

d. her desire to achieve independence



86. Which of the following is most
accurate concerning sexual-minority youth’s sexual orientation?

a. Self-labeling does not occur until
adulthood.

b. Disclosure occurs almost
immediately after self-labeling.

c. Parental acceptance after
disclosure is very important to well-being and identity development.

d. Disclosure typically occurs first
with family members and then with close friends.



87. A review of government-funded programs in schools that
taught abstinence found that ________.

a. 11 of the 13 programs presented
proven claims

b. sexual intercourse declined for
students in all program

c. the
incidence of sexually transmitted diseases decreased

d. 11
out of 13 programs presented unproven claims, subjective conclusions, and
unproven falsehoods



88. Which of the following is most accurate? 

a. Adolescents rarely contract
sexually transmitted diseases.

b. AIDS is the most common sexually
transmitted disease among adolescents.

c. Most young people are interested in
learning more about AIDS.

d. If chlamydia is untreated it may
cause pelvic inflammatory disease that leads to infertility.



89. Of sexually-active adolescent males,
about what percent use contraceptives consistently?

a. 10%

b. 20%

c. 30%

d. 50%



90. For adolescent males, the belief that males have a
responsibility to prevent pregnancy is associated with _____.

a. sexual abstinence

b. embarrassment about sexuality

c. consistent condom use

d. having multiple sex partners







91. Complications during labor and delivery associated with
having a baby at age 19 or younger are most likely a result of which of the
following?

a. inexperience with childbearing

b. poverty and inadequate prenatal
care

c. inconsistent condom use

d. none of these



92. Most studies of adolescent mothers
find that the child's father _____________________. 

a. abandons the mother and child in
the first month after birth

b. remains active in the child’s life
throughout early childhood and adolescence

c. is a teenager himself

d. remains in contact with the mother
and child



93. Which of the following statements about adolescent
fatherhood is more likely to be endorsed by African American males than by
European American males? 

a. If my girlfriend got pregnant, I
would want her to have an abortion.

b. If my girlfriend had a baby, I
would prefer to live with her and the baby.

c. If my girlfriend had a baby, I
would expect her parents to take care of the baby.

d. If
my girlfriend had a baby, I would worry that it would prevent me from going on
with my schooling.

, 

94. Which of the following is considered to be of central
importance to the prevention of early pregnancy for both boys and girls?

a. building
greater confidence in and commitment to the consistent use of contraception as
part of any sexual relationship

b. building
greater social expectations and commitment to assuming the financial and social
responsibilities of parenthood

c. fostering
a sense of self-efficacy and investment in academic goals leading to
post-secondary education

d. creating feelings of guilt about
engaging in sexual intercourse



95. In the process of resolving the psychosocial crisis of
________________, adolescents become psychologically connected to the social
life of their family, school, and community. 

a. group identity versus alienation

b. fidelity versus despair

c. intimacy versus isolation

d. industry versus inferiority



96. The groups in which a person aspires
to hold membership are called _______.

a. reference groups

b. membership groups

c. ethnic groups

d. cohort groups







97. Diverse processes such as joining a group, forming in-group
and out-group attitudes, stereotyping, rejecting a group, and exercising
leadership in a group, are all examples of __________.

a. group referencing

b. group reflecting

c. group representations

d. group operations



98. The intensification of emotions that occurs in early
adolescence often contributes to a   for adolescents to their groups.

a. distancing process

b. distillation 

c. deepening commitment 

d. categorization process



99. The formation of group identity
requires which of the following?

a. a sense of having a history of
shared experiences

b. adequate financial resources

c. a sense of sexual adequacy

d. adequate role containment



100. Hammed, who is 15, does not feel that he is a part of any
social group; he is uneasy in the presence of peers. He is experiencing ____________________. 

a. group identity

b. fidelity

c. alienation

d. inferiority
	

Question_Doc14_15Dec_7th

Question
	
39) The exclusive rights of ownership of property are
generally referred to as

A) level property rights.

B) private property rights.

C) public property rights.

D) common property rights.



40) A resource that is a common property is

A) oil on land owned by a drilling and refining company.

B) natural gas on land owned by an energy producer.

C) timber on land owned by a lumber company.

D) water in a publicly owned river.



41) Property that is owned by everyone and therefore by no
one in particular is referred to as

A) common property.

B) social property.

C) private property.

D) commercial property.



42) Property owned by everyone (and thus no one in
particular) is generally referred to as

A) social property.

B) private property.

C) common property.

D) natural property.



43) Which of the following is NOT an example of common
property?

A) a trampoline

B) air

C) gravity

D) sunshine



44) Which type of property would be the most likely to
experience pollution?

A) common property

B) private property

C) property held in partnership

D) corporate property



45) For voluntary action to correct an externality,

A) transaction costs have to be high.

B) transaction costs have to be low.

C) transaction costs have to be split evenly between all of
the parties involved.

D) transaction costs are irrelevant.



46) All of the costs associated with making and enforcing
contracts are referred to as

A) alternative costs.

B) opportunity costs.

C) marginal costs.

D) transactions costs.



47) In a situation in which property rights are not
well-defined and social costs exceed private

costs, government can use all of the following to induce
producers to bring private costs into

alignment with social costs EXCEPT

A) taxing production.

B) coercive limits on production.

C) subsidization of production.

D) regulation of production.



48) Suppose a large tree on Adam's property blocks Eve's
view of the ocean. Adam accepts Eve's

offer of $15,000 to cut down the tree. This is an example of

A) internalizing externalities via voluntary agreements.

B) a result of logrolling.

C) a consequence of a positive externality.

D) a consequence of private costs exceeding social costs.

49) The costs associated with the negotiation and
enforcement of an agreement are

A) property costs.

B) resource factor costs.

C) transaction costs.

D) attorney fees.

50) When property rights are clearly defined, there is
generally a

A) law that must be passed to ensure fairness.

B) regulatory agency that handles externalities.

C) common property problem.

D) voluntary agreement that can be reached.



51) In order for a voluntary agreement to be reached in
general, transaction costs should be

A) infinite.

B) high relative to expected marginal benefits of the
agreement.

C) low relative to expected marginal benefits of the
agreement.

D) determined by the Environmental Protection Agency.



52) What is common property? What does common property have
to do with externalities?



53) Why are externalities associated with common property
rather than private property?



54) Explain why the buffalo almost became extinct while
cattle did not, even though both

provide similar goods for people.



1) The Framework Convention on Climate Change took place in

A) the 1973-1979 Tokyo Round

B) the 1987-1993 Uruguay Round

C) the 1997 Kyoto Protocol

D) the 2001 Doha Round



2) In the Kyoto Protocol, participating nations agreed to

A) trade carbon-dioxide permits.

B) eliminate all emissions of greenhouse gases by 2020.

C) reduce their overall emissions of greenhouse gases
between 1997 and 2020 to as much as 20

percent below 1990 levels.

D) buy greenhouse gas emission permits from developing
nations.



3) In 2005, the European Union began a program to

A) reduce greenhouse gas emissions by 10 percent within 5
years.

B) eliminate greenhouse gas emissions by 50 percent within
15 years.

C) subsidize firms that pollute more than a given limit.

D) allow the trading of carbon-dioxide permits among firms.



4) In a market for emission permits, firms that emit over
their allowed limits

A) are forced to shut down.

B) are taxed by the government for the amount of emissions.

C) receive a subsidy for the amount of emissions.

D) pay a price of these emissions.



5) In a market for emission permits, firms that emit over
their allowed limits

A) are forced to shut down.

B) are taxed by the government for the amount of emissions.

C) will sell their excess allowances through a trading
system.

D) must buy more allowances through a trading system.

6) In a market for emission permits, firms that emit below
their allowed limits

A) will buy even more allowances through a trading system.

B) are taxed by the government for the amount of emissions.

C) receive a subsidy for the amount of emissions.

D) will sell their excess allowances through a trading
system.



7) In theory, the Emissions Trading Scheme would

A) cause firms to generate more pollution than their allowed
limits.

B) cause firms to generate less pollution than their allowed
limits.

C) raise the production costs of all firms.

D) lower the production costs of all firms.



8) Under the Emissions Trading Scheme, what would happen if
governments reduce firms'

pollution caps?

A) The market clearing price of pollution permits will
increase.

B) The market cleaning price of pollution permits will
decrease.

C) The marketing cleaning price of pollution permits will
not change.

D) The marketing clearing price of pollution permits will
cease to exist.



9) The 1997 Kyoto Protocol was signed by

A) only the United States and the European Union.

B) only nations in Asia.

C) more than three dozen nations.

D) all nations in the world.

10) The Kyoto Protocol was signed by participating nations
in

A) 1872.

B) 1972.

C) 1997.

D) 2007.

11) Participating nations in the 1997 Kyoto Protocol agreed
to reduce overall greenhouse gases

emission

A) to as much as 20 percent below the levels of the 1990s
through 2020.

B) to as much as 10 percent below the levels of the 1990s
through 2010.

C) to as much as 100 percent below the levels of the 1990s
through 2007.

D) to as much as 50 percent below the levels of the 1990s
through 2100.

12) The Emission Trading Scheme of the European Union

A) created a market for pollutants.

B) sets a cap on the amount of pollutants in each country.

C) allowed firms to benefit from emitting pollutants.

D) sets the amount of per-unit tax on each pollutant.

13) Which of the following best describes the impact of the
Emissions Trading Scheme in the

European Union between 2005 and the late 2000s?

A) Overall greenhouse gas emissions increased.

B) Overall greenhouse gas emissions decreased.

C) Overall greenhouse gas emissions were totally eliminated.

D) Overall greenhouse gas emissions were constant.

14) Which of the following was signed in the Kyoto Protocol?

A) The Framework Convention on Climate Change

B) The Zero Greenhouse Gas Agreement

C) The Treaty on Global Warming

D) The Emission Trading Scheme



















































































15) Participating nations in the 1997 Kyoto Protocol agreed
to reduce overall greenhouse gases

emission through 2020 to

A) as much as 20 percent below the levels in the 1990s.

B) as much as 5 percent below the levels in the 1990s.

C) as much as 50 percent below the levels in the 1990s.

D) as much as 50 percent below the levels in the 1960s.

16) The EU Emission Trading Scheme created a market for

A) permits to emit greenhouse gases.

B) cigarettes.

C) marijuana.

D) devices that lower the global temperature.



17) Which of the following is TRUE of the European Union's
Emissions Trading Scheme?

A) Firms are taxed based on the their pollution levels.

B) Firms are forced to shut down when they exceed their
pollution limits.

C) Governments subsidize firms to develop devices to reduce
pollution.

D) Firms can trade pollution permits to meet their pollution
limits.



18) By 2006, the market price of European Union emissions
allowances dropped because

A) governments set their overall emission caps too high.

B) firms had drastically reduced their emissions.

C) firms underreport their emission amounts.

D) the market did not clear.

19) If pollution is bad, why do we still use
pollution-causing resources such as coal and oil to

generate electricity?

A) Governments lack the political will to enforce the use of
pollution free resources.

B) The cost of using pollution free resources to generate
power in many circumstances is much

higher than generating that same power through conventional
pollution-causing means.

C) Pollution is only a private cost.

D) The transaction costs of pollution is too low.

20) Explain how a market for pollutant emission allowances
can induce firms to reduce the

amount of emissions.



21) "Creating a free market for carbon-dioxide emission
permits would only encourage firms to

pollute more." Do you agree or disagree? Why?



22) "Creating a free market for carbon-dioxide emission
permits would only encourage firms to

pollute more." Do you agree or disagree? Why?



1) Many ecologists argue that several species of whales are
close to extinction. If this is true, the

reason is

A) inadequate enforcement of international laws.

B) whales are a type of common property.

C) the marginal benefit of hunting and killing a whale is
greater than zero.

D) whale-killing technology is too productive.



2) All of following are commonly considered to be common
property EXCEPT

A) spotted owls in the wild.

B) fish in an ocean.

C) chickens raised in a farm.

D) wild salmon in a river.
	

HIST 101 – The easiest and hence most widespread

HIST 101 – The easiest and hence most widespread

Subject: History / General History
Question
a) identify the source;

b) discuss the meaning of these excerpted texts, and;

c) say something about the context in which they appeared (what, where, why, when, addressed to whom etc.). for each of the following.

1) “The easiest and hence most widespread explanation of the present misfortune is that it was brought about by the consequences of the lost War and that therefore the War is the cause of the present evil. There may be many who will seriously believe this nonsense but there are still more from whose mouth such an explanation can only be a lie and conscious falsehood. . . . Didn’t these apostles of world conciliation . . . . glorify the benevolence of the Entente, and didn’t they shove full blame for the whole bloody struggle on Germany? . . . Will you claim that this was not so, you wretched, lying scoundrels? It takes a truly Jewish effrontery to attribute the blame for the collapse solely to the military defeat. . . .”

2) “Our strength lies in our quickness and our brutality….only in the East have I put my death-head formations in place with the command relentlessly and without compassion to send into death many women and children of Polish origin and language. Only thus can we gain the living space we need.”

3) “When high officials of the SS and the police call for atrocities and brutalities and publicly praise them, then within the shortest spell of time only the brutal will rule. With astonishing speed men of the same sick leanings and character will come together, in order to give full vent to their beastly and pathological instincts, as is the case in Poland. There is hardly any way to hold them in rein; for they must rightly feel themselves officially authorized and entitled to any atrocity.”

4) “The Battle of France is over. I expect that the Battle of Britain is about to begin….Hitler knows that he will have to break us in this island or lose the war. If we can stand up to him, all Europe may be freed and the life of the world may move forward into broad, sunlit uplands.

“But if we fail, then the whole world, including the United States, including all that we have known and cared for, will sink into the abyss of a new dark age made more sinister, and perhaps more protracted, by the lights of perverted science. Let us therefore brace ourselves to our duties, and so bear ourselves, that if the British Empire and its Commonwealth last for a thousand years, men will still say, This was their finest hour.”

5) “We entered this war because violations of right had occurred which touched us to the quick and made the life of our own people impossible unless they were corrected and the world secured once for all against their recurrence What we demand in this war, therefore, is nothing peculiar to ourselves. It is that the world be made fit and safe to live in; and particularly that it be made safe for every peace-loving nation which, like our own, wishes to live its own life, determine its own institutions, be assured of justice and fair dealing by the other peoples of the world as against force and selfish aggression. All the peoples of the world are in effect partners in this interest, and for our own part we see very clearly that unless justice be done to others it will not be done to us.”

davenport acct510 {all discussions + reflections +connect homework +quizzes+ exams}

Question
	

 

 

 
Module 1 discussion
Financial statements are prepared in accordance
 with what? What governing bodies set accounting standards? Why do
 you think financial statements are required to be prepared using the same
 standards?
 










 

 

 
Module 1 Reflection
Please post your
 reflections from this week’s topic discussion and research. What was the
 learning process, what did you learn, what is still unclear? How will you use
 this information in the future? Your post must be a minimum of 300 words.
 













 

 

 
Module 2 discussion
What
 is the impact of accounting errors on the balance sheet and income
 statement? How are errors handled?
 











 

 

 
Module 2 Reflection
Please
 post your reflections from this week’s topic discussion and research. What
 was the learning process, what did you learn, what is still unclear? How will
 you use this information in the future? Your post must be a minimum of 300
 wor




 

 

 
Module 3 discussion
Why
 would someone be motivated to act in an unethical manner with respect to
 financial reporting?
 

 Provide an example of how someone could manipulate reporting and why you
 believe they would do such acts.
 

 
Module 3 Reflection
Please
 post your reflections from this week’s topic discussion and research. What
 was the learning process, what did you learn, what is still unclear? How will
 you use this information in the future? Your post must be a minimum of 300
 words
 











 

 

 
Module 4 discussion
Why
 is depreciation for income tax purposes an important concern of taxpayers and
 
 how does tax depreciation differ from
 financial accounting depreciation?
 

 
Module 4 Reflection
Please
 post your reflections from this week’s topic discussion and research. What
 was the learning process, what did you learn, what is still unclear? How will
 you use this information in the future? Your post must be a minimum of 300
 wor




 

 

 
Module 5 discussion
Compare
 and contrast the various types of partnership arrangements.
 

 Discuss which method you think is the best arrangement and why.
 

 
Module 5 Reflection
Please
 post your reflections from this week’s topic discussion and research. What
 was the learning process, what did you learn, what is still unclear? How will
 you use this information in the future? Your post must be a minimum of 300
 words
 

	

general business data bank

Question
	
81. Teddy purchased only one asset during the current year.
It placed in service machinery (7-year property)

on October 1st with a basis of $76,500. Calculate the maximum
depreciation expense, rounded to the

nearest whole number (ignoring section 179 and bonus
expensing).

82. Amit purchased two assets during the current year. Amit
placed in service computer equipment (5-

year property) on April 16th with a basis of $5,000 and
furniture (7-year property) on September 9th

with a basis of $20,000. Calculate the maximum depreciation
expense (ignoring section 179 and bonus

expensing):

83. Yasmin purchased two assets during the current year.
Yasmin placed in service computer equipment (5-

year property) on May 26th with a basis of $10,000 and
machinery (7-year property) on December 9th

with a basis of $10,000. Calculate the maximum depreciation
expense (ignoring section 179 and bonus

expensing):

84. Bonnie Jo used two assets during the current year. The
first was computer equipment with an original

basis of $15,000, currently in the second year of
depreciation, and under the half-year convention. This

asset was disposed of on October 1st of the current year.
The second was furniture with an original basis

of $24,000 placed in service during the first quarter,
currently in the fourth year of depreciation, and

under the mid-quarter convention. What is Bonnie Jo's
depreciation expense for the current year, rounded

to the nearest whole number?

85. Kristine sold two assets on March 20th of the current
year. The first was machinery with an original basis

of $51,000, currently in the fourth year of depreciation,
and under the half-year convention. The second

was furniture with an original basis of $16,000 placed in
service during the fourth quarter, currently in the

third year of depreciation, and under the mid-quarter
convention. What is Kristine's depreciation expense

for the current year, rounded to the nearest whole number?

86. Timothy purchased a new computer for his consulting
practice on October 15th of the current year. The

basis of the computer was $4,000. During the Thanksgiving
holiday, he decided the computer didn't meet

his business needs and gave it to his college-aged son in
another state. The computer was never used for

business purposes again. Timothy had $50,000 of taxable
income before depreciation. What is Timothy's

total cost recovery expense with respect to the computer
during the current year?

87. During August of the prior year, Julio purchased an
apartment building that he used as a rental property.

The basis was $1,400,000. Calculate the maximum depreciation
expense during the current year?

88. During April of the current year, Ronen purchased a
warehouse that he used for business purposes. The

basis was $1,600,000. Calculate the maximum depreciation
expense during the current year?

89. An office building was purchased on December 9th several
years ago for $2,500,000. The purchase price

was allocated as follows: building $1,900,000, landscaping
$100,000, and land $500,000. During the

current year, the 10th year, the building was sold on March
10th. Calculate the maximum depreciation

expense for the real property during the current year,
rounded to the nearest whole number?

90. Boxer LLC has acquired various types of assets recently.
Below is a list of assets acquired during 2010

and 2011:

Boxer did not elect section 179 expense or potential bonus
depreciation in 2010, but would like to elect

section 179 expense for 2011 (assume that taxable income is
sufficient). Calculate Boxer's maximum

depreciation expense for 2011, rounded to the nearest whole
number (ignore bonus depreciation for

2011).
	

economics homework

Question
	
1. The main advantage to a corporation is…

A) ease of entry

B) limited liability for the owners

C) dividends all go to one person

D) owners share managerial duty

E) all of the above

2. The main advantage to a sole
proprietorship is…

A) ease of entry

B) financial capital is easy to obtain

C) owners need little expertise in the day
to day business

D) limited liability for the owner

E) all of the above

3. The main disadvantage to a sole
proprietorship is…

A) profits must be shared

B) difficult and expensive to open

C) unlimited liability

D) single taxation

E) all of the above

4. The owners of a corporation are called

A) Corporate officers

B) The board of directors

C) Stockholders

D) Corporate executives

5. Profit is defined as

A) net revenue minus depreciation.

B) average revenue minus average total
cost.

C) marginal revenue minus marginal cost.

D) total revenue minus total cost.

6. Which of the following is most likely to
be a fixed cost?

A) materials

B) wages

C) rent

D) utilities

E) all of the above

7. A variable cost…

A) increases as production increases.

B) is a constant cost of production.

C) is always changing no matter the
circumstance.

D) is a cost like manager’s salaries, rent,
etc.

E) none of the above

8. Opportunity costs are comprised of

A) explicit costs.

B) implicit costs.

C) forgone income.

D) all of the above.

9. An example of an explicit cost of
production would be

A) the cost of forgone labor earnings for
an entrepreneur.

B) the cost of flour for a baker.

C) the lost opportunity to invest in other
capital markets when the money is invested in one’s business.

D) none of the above.

10. If marginal cost is rising

A) marginal product must be rising.

B) marginal product must be falling.

C) average variable cost must be falling.

D) average fixed cost must be rising.

11. Economies of scale occur when

A) long-run average total costs rise as
output increases.

B) average fixed costs are falling.

C) long-run average total costs fall as
output increases.

D) average fixed costs are constant.

12. For a firm in a perfectly competitive
market the price of the good is always equal to

A) marginal revenue.

B) average revenue.

C) equilibrium market price.

D) all of the above.

13. Which of the following is not a
characteristic of a perfectly competitive market?

A) Firms are price takers.

B) There are many sellers in the market.

C) Goods offered for sale are largely the
same.

D) Firms have difficulty entering the
market.

14. When firms are said to be price takers,
it implies that if a firm raises its price,

A) buyers will go elsewhere.

B) buyers will pay the higher price in the
short run.

C) competitors will also raise their
prices.

D) firms in the industry will exercise
market power.

15. Characteristics of a Monopoly include:

(i) sole seller of its product.

(ii) product does not have close
substitutes.

(iii) generates large economic profits.

(iv) they must sell at a certain price.

A) (i), (iii), and (iv)

B) both (i) and (iii)

C) both (i) and (ii)

D) all of the above

16. A fundamental source of monopoly market
power arises from

A) barriers to entry.

B) perfectly elastic demand.

C) perfectly inelastic demand.

D) availability of "free" natural
resources, such as water or air.

17. Monopolistically competitive firms are
typically characterized by

A) many firms selling identical products.

B) a few firms selling similar or identical
products.

C) a few firms selling highly different
products.

D) many firms selling similar, but not
identical products.

18. In markets characterized by oligopoly,

A) collusive agreements will always
prevail.

B) collective profits are lower under
cartel arrangements.

C) pursuit of self-interest by profit
maximizing firms always maximizes collective profits in the market.

D) there is tension between cooperation and
self-interest.

19. If identical products are sold by firms
participating in a market, the market is

(i) perfectly competitive.

(ii) an oligopoly.

(iii) monopolistically competitive.

A) (i) or (ii)

B) (ii) or (iii)

C) (i) or (iii)

D) (i) only

20. The Sherman Antitrust Act

A) enhanced the ability to enforce cartel
agreements.

B) restricted the ability of competitors to
engage in cooperative agreements.

C) was passed to encourage judicial
leniency in the review of cooperative agreements.

D) was concerned with self-interest dominated
Nash equilibriums in prisoners' dilemma games.

21. One way in which monopolistic
competition differs from oligopoly is

A) there are no barriers to entry in
oligopolies.

B) all oligopoly firms eventually earn zero
economic profits.

C) strategic interactions between firms are
rarely evident in oligopolies.

D) in oligopoly markets there are only a
few sellers.

22. Because of product differentiation, a
firm in a monopolistically competitive market

A) always has some market power.

B) is very similar to a perfectly
competitive firm.

C) does not face the elastic portion of its
demand curve.

D) is unaffected by the elasticity of
demand.

23. A company should produce at a level

A) that maximizes profit.

B) where marginal revenue is greater then
marginal cost

C) where marginal revenue is equal to
marginal cost

D) both A and B

E) both A and C

24. In markets with perfect competition

A) information is closely guarded and
difficult to obtain.

B) producers sell highly differentiated
products.

C) businesses must compete by keeping their
costs down.

D) new businesses find it very difficult to
enter the market.

E) none of the above

25. An externality exists when

A) the government intercedes in the
operation of private markets by forcing the market to adjust to the balance of
supply and demand.

B) markets are not able to reach
equilibrium.

C) a firm sells its product in a foreign
market.

D) a person engages in an activity that
influences the well-being of a bystander and yet neither pays nor receives
payment for that effect.

26. Negative externalities occur when one
person's actions

A) cause another person to lose money in a
stock market transaction.

B) cause his or her employer to lose
business.

C) reveal his or her preference for
foreign-produced goods.

D) adversely affect the well-being of a
bystander (or bystanders) who is (are) not party to a market exchange.

27. Private goods are

A) excludable and nonrival.

B) nonexcludable and rival.

C) excludable and rival.

D) nonexcludable and nonrival.

28. Goods that are nonexcludable and
nonrival are

A) public goods.

B) private goods.

C) natural monopolies.

D) common resources.

29. The purpose of the government producing
a public good is…

A) to keep some companies from producing
certain goods

B) to make it more efficient to produce

C) to provide goods and services that may
not be produced due to market failure

D) to share the costs of production

E) all of the above

30. A business is producing paper in a
small community. An example of negative externalities in this scenario would be
…

A) added benefits to the production of
paper created by the business

B) added costs to the production of paper
paid for by the business

C) of little effect on the communities
located around the paper mill

D) costs incurred by those with no involvement
with the production of the paper

E) all of the above

31. Education makes Chris a better worker,
voter, parent, and citizen. Since the benefits from education go beyond those
that Chris enjoys himself, education provides

A) Increasing marginal utility

B) Externalities that should be taxed

C) Decreasing marginal utility and should
be taxed

D) Externalities that should be subsidized

E) None of the above

32. If the demand for labor rises and the
supply of labor remains the same, wages will

A) rise

B) fall

C) remain the same

D) more information needed to determine an
answer

E) be adjusted by union officials

33. If the minimum wage is set higher than
the equilibrium wage

A) fewer people will be available to work

B) fewer jobs will be available than at the
equilibrium wage

C) more benefits will be offered to workers

D) more jobs will be available than at the
equilibrium wage

E) all of the above

34. Which of the following best explains
why athletes have the potential to have a higher income than civil service
individuals (policeman, teachers, fire fighters, etc…)?

A) There is a high demand for great
athletes

B) There is a high supply of civic service
individuals

C) There is a low supply of great athletes

D) Because of differences in supply and
demand, equilibrium wages will be higher for athletes than civic service
individuals

E) all of the above

35. Which sector currently employs the
highest percentage of workers in the U.S.?

A) agriculture

B) service

C) manufacturing

D) professional sports

E) industrial

36. Incomes may be different from one group
of people to the next because of

A) discrimination between the groups

B) differences in education among the
groups

C) differences in productivity among the
groups

D) all of the above

E) none of the above

37. Labor unions typically negotiate wages,
employee benefits, and

A) company stock dividends.

B) employee tax deductions.

C) workplace rules and practices.

D) company marketing strategies.

E) all of the above

38. What is the name of the process when
management and a labor union negotiate a new labor agreement?

A) arbitration

B) collective bargaining

C) conciliation

D) mediation

E) injunction

39. When citizens are subject to an income
level that falls below the poverty threshold, the U. S. government often
initiates..

A) Policies that punish those taking
advantage of these people.

B) A “safety net” that is created to reduce
the level of poverty.

C) Steps to encourage private entities,
such as individual and corporations, to reduce the poverty level.

D) Both a and b.

E) Both b and c.

40. Most of the total income earned in the
U.S. economy was ultimately paid to households in the form of

A) rent.

B) wages.

C) interest.

D) profit.

41. When a labor market experiences a
surplus of labor, there is downward pressure on

A) wages.

B) the marginal productivity of labor.

C) final product price.

D) the demand for labor.

42. When the supply of workers is scarce,
one would predict that market wages would be

A) determined solely by factors that affect
demand.

B) determined outside the domain of the
neoclassical theory.

C) high, other things equal.

D) low, other things equal.

43. For a given wage, which of the
following statements is true?

A) The supply of labor for easy jobs
exceeds that for difficult jobs.

B) The supply of labor for fun jobs exceeds
that for dull jobs.

C) The supply of labor for safe jobs
exceeds that for dangerous jobs.

D) all of the above
	

2106AFE Company Law – Week 5 and 6 Workbook

2106AFE Company Law – Week 5 and 6 Workbook

Subject: Business / Accounting
Question

Part A

Sam, Adrian and Michael call to make an appointment with your firm, Fees Ruthless, Accountants. You have been asked to establish their new company (No-Tax Agents Pty Ltd). You advise them not to bother with their own Constitution, but instead to rely on the replaceable rules in the Corporations Act 2001 (Cth).

Advise who should be appointed as directors of their company in view of the following information:

(a) Sam states that he does not want to be appointed a director or company secretary. He suggests instead that: his family company be appointed as a director; and the company not have a company secretary;

(b) Adrian is currently unavailable for meetings as she has five months still to serve for her last conviction for falsifying company accounts;

(c) Michael is 72 years old and has dementia. A trustee has been appointed to administer his estate.
Part B

Sabrina was appointed a non-executive director of Transuniverse Travel Corporation Limited. After her appointment Sabrina set up an investment company to engage in share trading. As a non-executive director of Transuniverse, Sabrina was often provided with confidential information. Sabrina used this information obtained as a Transuniverse director to make two share purchases and a share sale. Unfortunately, Sabrina actually lost money from the share trades and Transuniverse did not suffer any loss as a result of Sabrina’s conduct.

Given the following circumstances:

• Sabrina admitted that she breached theCorporations Act;

• Sabrina co-operated with the ASIC in the course of its investigations;

• Sabrina was a very well known and respected public figure;

• ASIC and Sabrina agreed that an appropriate period of disqualification was 4 years.

Assuming that Sabrina was found to have breached s183 Corporations Act. Apply the criteria inASIC v Adlerand determine a disqualification period (if any) for Sabrina.

Part C

Arana, Mirabella and John establish a company in which they each take shares. Arana has another job as an accountant and so she contributes most of the money to the new company and receives 60% of the shares in the company. Arana chooses not to become a director of the company. Mirabella and John each take a 20% shareholding and also act as the company’s directors. However, John forgets to submit a written acceptance of his role as a director. During the first year, the company runs well. Given that Arana owns a majority of the shares in the company, she is consulted about any significant decisions by Mirabella and John. If Arana disagrees with the course of action proposed by Mirabella and John, then normally they will compromise to suit Arana. One day while Arana is inspecting the company’s accounts, she notices some accounting anomalies which suggest that Mirabella has been misappropriating funds from the company. Furthermore, Arana believes that the company has been insolvent for some time.

a) Does Arana fit within the definition of an officer under the Corporations Act?

b) Can John avoid liability as a director for insolvent trading by arguing that he was not officially appointed (due to the fact that he did not accept his position in writing)?

 

Three Finance Qs (Requires Detailed Calc Using Excel)

Question
	
Question 1: Corporate Valuation
You have been hired as a consultant to Advanced Fuels Corporation, to find a way to

increase its value to the shareholders. The CEO has asked you to determine the value of a

privately held company that Advanced Fuels is considering to acquire. You design your

presentation to the CEO on defining and determining the following items:
(a). What are assets?in?place? How can their value be determined?
(b). What are nonoperating assets? How can their value be determined?
©. What is the total value of a corporation? Who has claims on this value?
d). The privately held company is owned by a family, 10 million shares of stock. Free Cash

Flow of this company is $20 million, its WACC is 12%, and FCF is expected to grow at a

constant annual rate of 7%. The company has holdings in marketable securities of $90

million. It is financed with $200 million of debt, $250 million of book common equity.

1. What is the value of operations?

2. What is the total corporate value?

3. What is the intrinsic value of equity?

4. What is the intrinsic stock price per share?

5. What would be a fair offer price (per share) to this company? Explain.
e). List the six potential managerial behaviors that can harm a firm’s value?
Question 2: Dividend Distribution
(a). Mortal Inc. expects to have a capital budget of $500,000 next year. The company

wants to maintain a target capital structure with 30% debt and 70% equity, and its

forecasted net income is $400,000. If the company follows the residual dividend policy,

how much in dividends, if any, will it pay?

(b). Pavlin Corp.'s projected capital budget is $2,000,000, its target capital structure is 40%

debt and 60% equity, and its forecasted net income is $1,000,000. If the company follows a

residual dividend policy, how much dividends will it pay or, alternatively, how much new

stock must it issue?
Question 3 Capital Structure Decisions
The A. J. Croft Company (AJC) currently has $200,000 market value (and book value) of

perpetual debt outstanding carrying a coupon rate of 6%. Its earnings before interest and

taxes (EBIT) are $100,000, and it is a zero growth company. AJC's current cost of equity is

8.8%, and its tax rate is 40%. The firm has 10,000 shares of common stock outstanding

selling at a price per share of $60.00.
(a). What is AJC's current total market value and weighted average cost of capital?
(b). The firm is considering moving to a capital structure that is comprised of 40% debt

and 60% equity, based on market values. The new funds would be used to replace the old

debt and to repurchase stock. It is estimated that the increase in risk resulting from the

additional leverage would cause the required rate of return on debt to rise to 7%, while the

required rate of return on equity would rise to 9.5%. If this plan were carried out, what

would be AJC's new WACC and total value? Hint: V= FCF/WACC
	

fin 1-3.!!

Question
	
Scanlon Inc.'s CFO hired you as a consultant to help her estimate the cost of capital. You have been provided with the following data: r RF = 4.10%; RP M = 5.25%; and b = 1.30. Based on the CAPM approach, what is the cost of equity from retained earnings?
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 12.75%. The firm will not be issuing any new stock. What is its WACC?