FIN 200 Week 4 CheckPoint Week Four Quiz
Uploaded by ddscoolz on Feb 22, 2013
1) A rapid rate of growth in sales may require
A. increased borrowing by the firm to support the sales increase.
B. higher dividend payments to shareholders.
C. the firm to be more lenient with credit customers.
D. sales forecasts to be made less frequently.
2) A firm utilizing LIFO inventory accounting would, in calculating gross profits, assume that
A. all sales were from beginning inventory.
B. all sales were from current production.
C. sales were from current production until current production was depleted, and then use sales from beginning inventory.
D. all sales were for cash.
3) A firm has beginning inventory of 300 units at a cost of $11 each. Production during the period was 650 units at $12 each. If sales were 700 units, what is the value of the ending inventory using LIFO?
A. $3,250
B. $2,750
C. $3,300
D. $2,550
4) In developing data for accounts receivable for the pro forma balance sheet, the analyst is most likely to turn to the:
A. cash budget.
B. pro forma income statement.
C. prior balance sheet.
D. statement of retained earnings
C. an operating loss.
D. an increase in plant and equipment.
5) If the business cycle were just beginning its upswing, which firm would you anticipate would be likely to show the best growth in EPS over the next year? Firm A has high combined leverage and Firm B has low combined leverage.
A. Firm B
B. Firm A
C. Indifferent between the two
D. It depends on how much financial leverage each firm has.
6) Which of the following is concerned with the change in operating profit as a result of a change in volume?
A. Break-even point
B. Combined leverage
C. Financial leverage
D. Operating leverage
7) 1 If sales volume exceeds the break-even point, the firm will experience
A. an operating profit.
B. an increase in stock price.
C. an operating loss.
D. an increase in plant and equipment.
8) If a firm has fixed costs of $30,000, a price of $4.00, and a breakeven point of 15,000 units, the variable cost per unit is:
A. $2.00
B. $4.00
C. $5.00
D. $.50