Multiple Questions Answers

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1) An investor’s risky portfolio is made up of individual stocks. Which of the following statements about this portfolio is true?
A. Each stock in the portfolio has its own beta. 
B. Selling any stock in this portfolio will lower the beta of the portfolio. 
C. An investor cannot change the risk of this portfolio by her choice about personal leverage. 
D. Each stock in the portfolio will have a beta greater than 1. 

2) An all-equity-financed firm would __________.
A. not pay any income taxes, because interest would exactly offset its taxable income. 
B. pay corporate income taxes, because it would have interest expense. 
C. not pay corporate income taxes, because it would have no interest expense. 
D. pay corporate income taxes if its taxable income is positive. 

3) If a firm wants to lower its weighted average cost of capital (WACC), one way to do so would be to
A. sell more common shares 
B. sell more bonds 
C. pay a cash dividend 
D. issue a stock dividend 

4) Boeing® is a world leader in commercial aircraft. In the face of competition, Boeing® often faces a critical __________ decision: whether to develop a new generation of passenger aircraft.
A. present value 
B. payback 
C. capital budgeting 
D. dividend 

 

 

 

A+ Answers

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Question 15 

 

Suppose you are proving that an integer derived in a certain way is even, and that you are at a point in the proof that you have the integer expressed as 7(4k2 + 4k + 1) + 1. How should you rewrite this expression to show that the integer is even?

28k2 + 28k + 7 + 1

28k2 + 28k + 8

20(k2 + k) + 8(k2 + k + 1)

2(14k2 + 14k + 4)

 

 

Question 16 

 

Which one of the following gives a recursive algorithm for computing an, where n is a positive integer and a is a real number?

 

procedure power(a: real number, n: positive integer)

if n = 1 then power(a, n) := a

else power(a, n) := a∙power(a, n)

procedure power(a: real number, n: positive integer)

for i = 1 to n

power := a∙power

procedure power(a: real number, n: positive integer)

power := a

for i = 2 to n

power := a∙power

procedure power(a: real number, n: positive integer)

if n = 1 then power(a, n) := a

else power(a, n) := a∙power(a, n – 1)

 

 

Question 17 

 

Let f be the function such that f(0) = 1, f(1) = 4, and

f(n) = f(n – 1)∙f(n – 2) + 1 for all integers n greater than 1. Which one of the following is true?

 

f(3) = 4 and f(4) = 105

f(3) = 5 and f(4) = 21

f(3) = 21 and f(4) = 106

f(3) = 20 and f(4) = 105

 

 

 

 

Question 18 

 

If {an} is the sequence defined by an = (n + 5)/2 for all positive integers n, which one of the following is a recursive definition for the sequence?

 

a1 = 1 and, for n = 2, 3, 4, . . . ,

an = an–1 + 5/2

 

a1 = 1 and, for n = 2, 3, 4, . . . ,

an = an–1 + 1/2

 

a1 = 3 and, for n = 2, 3, 4, . . . ,

an = an–1 + 5/2

 

a1 = 3 and, for n = 2, 3, 4, . . . ,

an = an-1 + 1/2

 

 

Question 19  

Use the graph below to match each quantity with the correct value.

 

:

total number of vertices?

number of edges connecting a and c?

number of edges connecting a and b?

degree of vertex e?

 

 

 

Multiple choice

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1. Which of the following statement completions is CORRECT?  If the yield curve is upward sloping, then the marketable securities held in a firm’s portfolio, assumed to be held for emergencies, should

consist mainly of long-term securities because they pay higher rates.

consist mainly of short-term securities because they pay higher rates.

consist mainly of U.S. Treasury securities to minimize interest rate risk.

consist mainly of short-term securities to minimize interest rate risk.

be balanced between long- and short-term securities to minimize the adverse effects of either an upward or a downward trend in interest rates.

  

2. Other things held constant, which of the following will cause an increase in net working capital?

Cash is used to buy marketable securities.

A cash dividend is declared and paid.

Merchandise is sold at a profit, but the sale is on credit.

Long-term bonds are retired with the proceeds of a preferred stock issue.

Missing inventory is written off against retained earnings.

  

3. Which of the following statements is CORRECT?

Other things held constant, the higher a firm’s days sales outstanding (DSO), the better its credit department.

If a firm that sells on terms of net 30 changes its policy to 2/10 net 30, and if no change in sales volume occurs, then the firm’s DSO will probably increase.

If a firm sells on terms of 2/10 net 30, and its DSO is 30 days, then the firm probably has some past-due accounts.

If a firm sells on terms of net 60, and if its sales are highly seasonal, with a sharp peak in December, then its DSO as it is typically calculated (with sales per day = Sales for past 12 months/365) would probably be lower in January than in July.

If a firm changed the credit terms offered to its customers from 2/10 net 30 to 2/10 net 60, then its sales should increase, and this should lead to an increase in sales per day, and that should lead to a decrease in the DSO.  

 

4. Which of the following statements is NOT CORRECT?

A company may hold a relatively large amount of cash and marketable securities if it is uncertain about its volume of sales, profits, and cash flows during the coming year.

Credit policy has an impact on working capital because it influences both sales and the time before receivables are collected.

The cash budget is useful to help estimate future financing needs, especially the need for short-term working capital loans.

If a firm wants to generate more cash flow from operations in the next month or two, it could change its credit policy from 2/10 net 30 to net 60.

Managing working capital is important because it influences financing decisions and the firm’s profitability. 

 

w4 team hw

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100 words minimum with reference due in 5 hours. Only do letter B

 

MANAGERIAL ANALYSIS

Ideal Manufacturing Company of Sycamore, Illinois, has supported a research and development (R&D) department that has for many years been the sole contributor to the company’s new farm machinery products. The R&D activity is an overhead cost center that provides services only to in-house manufacturing departments (four different product lines), all of which produce agricultural/farm/ranch related machinery products.

The department has never sold its services outside, but because of its long history of success, larger manufacturers of agricultural products have approached Ideal to hire its R&D department for special projects. Because the costs of operating the R&D department have been spiraling uncontrollably, Ideal’s management is considering entertaining these outside approaches to absorb the increasing costs. But, (1) management doesn’t have any cost basis for charging R&D services to outsiders, and (2) it needs to gain control of its R&D costs. Management decides to implement an activity-based costing system in order to determine the charges for both outsiders and the in-house users of the department’s services.

R&D activities fall into four pools with the following annual costs.

Market analysis

$1,050,000

Product design

2,350,000

Product development

3,600,000

Prototype testing

1,400,000

Activity analysis determines that the appropriate cost drivers and their usage for the four activities are:

Activities

Cost Drivers

Total Estimated Drivers

Market analysis

Hours of analysis

15,000

hours

Product design

Number of designs

2,500

designs

Product development

Number of products

90

products

Prototype testing

Number of tests

500

tests

Instructions

(a)  

Compute the activity-based overhead rate for each activity cost pool.

(b)  

How much cost would be charged to an in-house manufacturing department that consumed 1,800 hours of market analysis time, was provided 280 designs relating to 10 products, and requested 92 engineering tests?

 

(c)  

How much cost would serve as the basis for pricing an R&D bid with an outside company on a contract that would consume 800 hours of analysis time, require 178 designs relating to 3 products, and result in 70 engineering tests?

(d)  

What is the benefit to Ideal Manufacturing of applying activity-based costing to its R&D activity for both in-house and outside charging purposes?

 

Multiple Questions Answers

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1. A government places an order for a particular item of equipment and encumbers $5,500. The item arrives accompanied by an invoice for $5,200. The entries that the government should make should include (but no necessarily be limited to):
a. A debit to expenditures for $5,200, a debit to fund balance for $300, and a credit to reserve for encumbrances for $5500
b. A debit to expenditures for $5200, a credit to encumbrances for $5200, and a credit to accounts payable for $5200
c. A debit to expenditures for $5200, a credit to encumbrances for $5500, and a credit to accounts payable for $5200
d. A debit to expenditures for $5200, a credit to reserve for encumbrances for $5200, and a credit to accounts payable for $5200

2. Per GASB Statement No. 34, governments must..
a. Prepare a general fund budget on a cash basis
b. Prepare a general fund budget on a modified accrual basis
c. Prepare a schedule that reconciles any differences between amounts reported on a GAAP basis and a budgetary basis
d. Prepare a schedule that reconciles any differences between the original budget and the amended budget


3. The amount that a government has available to spend for a particular purpose in a particular year would be indicated by
a. Encumbrances minus the sum of appropriations, expenditures and net adjustments
b. Reserve for encumbrances plus appropriations minus the sum of expenditures and net adjustments
c. Appropriations plus encumbrances minus the sum of expenditures and net adjustments
d. Appropriations minus the sum of expenditures, encumbrances and net adjustments


4. Upon ordering supplies a government should…
a. Debit encumbrances and credit reserve for encumbrances
b. Debit reserve for encumbrances and credit encumbrances
c. Debit expenditures and credit encumbrances
d. Debit expenditures and credit vouchers payable

Multiple choice

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1. On January 1, 2011, Connie, Jill, and Hillary , formed a three-person equal partnership with Connie and Jill each contributing $100,000 and Hillary contributing securities with an adjusted basis to her of $60,000 and a fair market value of $100,000. On September 30, 2011, the partnership sold the securities for $130,000. How much gain was required to be allocated to Hillary as a result of the sale by the partnership?

A. $30,000.

B. $40,000.

C. $50,000.

D. $70,000.

 

2. Ronald and Roy formed an equal partnership, R&R Partnership, a general partnership, on January 1, 2011. Ronald contributed $100,000 in exchange for his one-half interest in R&R partnership. Roy contributed land worth $100,000 and with an adjusted basis to Roy of $30,000 in exchange for his one-half interest in the partnership. Roy is a real estate developer, and at the time of the contribution, the land was inventory in his hands. The land is a capital asset in the hands of R&R Partnership. If R&R Partnership sells the land in 2017 to an unrelated taxpayer for $180,000, how much gain will be recognized by R&R Partnership and what will be the character of the gain?

A. $80,000, all of which gain will be ordinary income

B. $150,000,all of which gain will be capital gain.

C. $150,000,all of which gain will be ordinary income.

D. $150,000, consisting of $80,000 capital gain and $70,000 ordinary income.

 

4. What is Margaret’s adjusted basis in her partnership interest in MP Partnership at the end of 2011?

A. 0.

B. $1,300.

C. $9,000.

D. $2,700.

 

Glenda received a proportionate non liquidating distribution from the EFG Partnership. The distribution consisted of $10,000 cash and property with an adjusted basis to the partnership of $34,000 and a fair market value of $42,000. Immediately before the distribution, Glenda’s adjusted basis in her partnership interest was $60,000. How much is Glenda’s basis in the non cash property distributed to her?

A. $10,000.

B. $34,000.

C. $42,000.

D. $50,000.

 

Multiple Questions Answers

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1. By having a “good will,” Kant fundamentally meant that one:
Should use one’s conscience and intuition to determine morality.
Should have the strength and will-power to get power and position and to achieve one’s goals.
Should have the strength of character to do what is morally right and not do what is morally wrong.
Should always be the first to buy a “round of drinks” for one’s friends at Happy Hour.


2. Kantian ethics can best be characterized by:
The consultation of an outside source, such as a person or a book, for guidance.
The belief that a person must decide what course of action is proper based on that person’s own set of beliefs and feelings.
Determining which course of action produces the greatest amount of good for society.
A set of universal moral rules based on reasoning that must be applied in all situations and characterized by consistency and rationality.


3. World Development Corporation suggests that its employees apply the Categorical Imperative to ethical issues that arise at work. This theory requires that the employees
Seek to overthrow unjust governments by any means at their disposal
Categorize the issues according to profitability and legality
Evaluate their actions in light of how they treat human beings
Take whatever steps are necessary to survive since one can say categorically that it is a “moral jungle” in the business world.

 


4. Consumer Products, Inc., asks its employees, many of whom are unionized, to apply the Utilitarian theory of ethics. This theory does NOT require
A choice among alternatives that will produce maximum social utility
A determination of what individuals will be affected by an action
An assessment of the positive and negative consequences of alternative actions on individuals affected
The acquiring of the means of production and distribution by the workers.

Multiple Questions Answers

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1.Meranda Corporation purchases a machine for $125,000. It has an estimated salvage value of $10,000 and is expected to produce 50,000 units in its lifetime. During the first year of operation, it produced 14,500 units. To the nearest dollar, the depreciation for the first year under the units of production method will be 
A. $35,500. 
B. $31,250. 
C. $36,250. 
D. $33,350.

 

2.Brandon Company completed an aging of its accounts receivable and came up with an estimated amount of $6,342. The credit sales for the period are $85,000. The balance in the allowance for doubtful accounts is a debit of $817. If Brandon uses 5% of credit sales as its estimating uncollectable accounts, how much will the credit be to the allowance for doubtful accounts if Brandon uses the estimate of aging receivables as its method of estimating uncollectable accounts?


A. $7,159 Using estimate of aging receivables

B. $5,067

C. $4,250

D. $5,525

 

3.Brandon Company completed an aging of its accounts receivable and came up with an estimated amount of $6,342. The credit sales for the period are $85,000. The balance in the allowance for doubtful accounts is a debit of $817. If Brandon uses 5% of credit sales as its estimating uncollectible accounts, how much will the credit be to the allowance for doubtful accounts if Brandon uses the percent of credit sales as

its method of estimating uncollectible accounts?

 

A. $5,525

B. $5,067

C. $7,159

D. $4,250 Using 5% of credit sales

 

4. Domestic Co. establishes Foreign Subsidiary Co. at the beginning of the current reporting year. The primary analytical consideration resulting from this business decision is the:
A. establishment of a separate legal entity.
B. additional financial statements produced by the newly created entity.
C.XXXcreation of more detailed segment disclosures.
D. reporting of Domestic Co.’s financial statements on a consolidated basis.
5. Assume that an entity depreciates equipment purchased this year on a straight-line basis for financial reporting purposes and uses an accelerated method for tax purposes. If the company acquires more expensive equipment in the next reporting year, the company’s next balance sheet would report a ____________ than the current balance sheet.
A. larger deferred tax liability
B. smaller deferred tax liability
C. larger deferred tax asset 
D.XXX smaller deferred tax asset 

6. In the 1990s, many HMOs felt their participation in Medicare HMOs was essential for their business strategy. The interest of health plans in contracting with Medicare arose from the belief that:
A.XXX it could be profitable.
B. employers wanted HMO options for retirees.
C. contracts with Medicare guaranteed at least a 5-year contract.
D. Both B and C are correct.

7. A competency approach to job analysis does NOT include:
A. performance appraisal.
B. discovering unassigned duties.
C. assessing the employee’s attitude on the job.
D. compensation.
E.XXX employee selection criteria.

8. Policies differ from procedures and rules. Which of the following is the correct definition for a policy? A policy:
A. is a general statement about the organization’s position on an issue.
B.XXX defines the way an organization deals with broad issues.
C. defines expected behaviors of employees at work.
D. summarizes the legal obligations of the health care organization.

 

9. Sally, an R.N. who has worked in an ICU for seven years, is working with Joan, a recently graduated nurse, and new to the ICU. Sally is demonstrating the correct procedure for infusion therapy with a patient. Instruction on proper procedures would be considered:
A.XXX employee development.
B. integrated employee training.
C. team building.
D. the delivery phase of the three-phase training process.

A+ Answers

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1. Tech, Inc., sells its brand-name computer equipment directly to its franchised retailers. Depending on how existing franchisees do, Tech may limit the number of franchisees in a given area to reduce intrabrand competition. Tech’s restriction on the number of dealers likely is
A) a per se violation of the Sherman Act.
B) exempt from the antitrust laws.
C) subject to continuing review by the appropriate federal agency.
D) subject to the rule of reason.

2. Francis owns a small motel in Sugarloaf Key. She notices by means of public advertising that her competitors in Big Pine Key and Ramrod Key have extended by two weeks their “winter season” and thus their winter season higher rates. Francis also notices the “no vacancy” signs at her competitors’ motels. So, Francis decides to extend the winter season at her motel too. Francis has engaged:
A) Illegal horizontal price-fixing by means of an express agreement.
B) Illegal horizontal price-fixing by means of an implied agreement
C) Legal action by means of the doctrine of Conscious Parallelism
D) Legal action since anti-trust law does not apply to small motels, only large ones and hotels.

3. General Construction contracts to build a store for Home Stores for $1 million. In mid-project, Home repudiates the contract, and General stops working. General incurred costs of $600,000 and would have made a profit of $100,000. General’s measure of damages likely is
A) $1 million.
B) $700,000.
C) $100,000.
D) nothing.

4. The four shareholders of Delta, Inc., want to prevent each other from selling the shares to third parties without first being given the opportunity to buy them. The shareholders can provide for this in
A) a buy-sell agreement that includes a “take-along” clause.
B) a buy-sell agreement that includes a right of first refusal.
C) a key-person clause that specifies who can sell what to whom.
D) none of the above.

A+ Answers of the following Questions

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1. Eagle Manufacturing, Inc., contracted with Digital Repair Services to maintain Eagle’s computers. A “Liquidated Damages Clause” provides that Digital will pay Eagle $500 for each day that Digital is late in responding to a service request. If Digital is three days late in responding, and Eagle sues to enforce this clause, Eagle will
A) lose, because liquidated damages clauses violate public policy.
B) lose, unless the liquidated damages clause is determined to be a penalty.
C) win, because liquidated damages clauses are always enforceable.
D) win, unless the liquidated damages clause is determined to be a penalty.

2. Fast Ed, a stock trader, engages in a “pump and dump” scheme whereby he goes into Internet chat stock rooms and “hypes,” praises, and extols certain stocks he owns. He says such things as: “This is the best stock ever.” “This stock is great and will make us a fortune.” “You MUST own this stock in your portfolio.” He does repeatedly and uses several aliases. Then, when Fast Ed has “pumped up” the price of the stock to a certain level, he calls his broker to sell, that is, to “dump,” the stock. He makes a lot of money with this scheme. Fast Ed is likely acting:
A) Illegally pursuant to the common law tort of deceit since he did not disclose the aliases.
B) Illegally pursuant to the Securities Act of 1934 for engaging in stock manipulation.
C) Legally since he was careful not to make any misrepresentations of material fact regarding the stock, and just used “puffing” or sales talk.
D) Legally since everyone knows not to put any credence behind what people say in chat rooms, especially about stocks, and thus “Let the buyer beware.”

3. Stan buys a CD player from Tom, his neighbor, who agrees to keep the player until Stan picks it up. Before Stan can get it, the player is stolen. The loss is suffered by
A) Stan only.
B) Tom only.
C) Stan and Tom.
D) none of the above.

 

4. Tech, Inc., sells its brand-name computer equipment directly to its franchised retailers. Depending on how existing franchisees do, Tech may limit the number of franchisees in a given area to reduce intrabrand competition. Tech’s restriction on the number of dealers likely is
A) a per se violation of the Sherman Act.
B) exempt from the antitrust laws.
C) subject to continuing review by the appropriate federal agency.
D) subject to the rule of reason.