CFIN-SAQ CH 1-7 EXAM 100% SOLVED CORRECTLY
Which of the accounts listed below varies with sales?
Select one:
a. accounts receivable
b. cost of goods sold
c. administrative salaries
d. A and B
e. None of the above. - ANSWER a and b
Some of the qualitative factors that are company specific include
Select one:
a. current management.
b. age of facilities.
c. A and B
d. None of the above - ANSWER a and b
Surveys produced by Robert Morris Associates are useful in
Select one:
a. qualitative analysis
b. quantitative analysis
c. neither A nor B - ANSWER quantitative analysis
Accurate forecasts that can be backed up with considerable detail are worthless if they
do not come close to actual reality.
Choose one:
,a. TRUE
b. FALSE - ANSWER TRUE
By choosing the proportions of debt and equity in an optimal manner, the manager is
able to add value to the firm.
Choose one:
a. TRUE
b. FALSE - ANSWER TRUE
Management has two ways in which it can create value for the firm through components
on either side of the accounting identity.
Choose one:
a. TRUE
b. FALSE - ANSWER TRUE
If stockholders believe that the financial risk of a firm has fallen and everything else is
held constant, then the price of the stock will likely increase.
Choose one:
a. TRUE
b. FALSE - ANSWER TRUE
Compounding is the reverse of discounting.
Choose one:
a. TRUE
b. FALSE - ANSWER TRUE
The discount factor which can be used in the present value calculation is the rate of
return about which one is certain that a particular individual can achieve.
Select one:
, a. TRUE
b. FALSE - ANSWER TRUE
Greater risk should be rewarded with a greater return.
Select one:
a. TRUE
b. FALSE - ANSWER TRUE
To evaluate the present value of a future cash flow you would Select one:
a. discount the cash flow back to the present.
b. compound the cash flow to the future.
c. discount the cash flow one year into the future.
d. A and C. - ANSWER discount the cash flow back to the present
Value is added to the firm when
Select one:
a. earnings are enhanced.
b. financial risks are reduced.
c. A and B.
d. none of the above. - ANSWER a and b
Tax consequences of the capital gain on the sale of the old asset is
Select one:
a. A cost
b. A benefit
c. Neither A nor B - ANSWER a cost
Which of the accounts listed below varies with sales?
Select one:
a. accounts receivable
b. cost of goods sold
c. administrative salaries
d. A and B
e. None of the above. - ANSWER a and b
Some of the qualitative factors that are company specific include
Select one:
a. current management.
b. age of facilities.
c. A and B
d. None of the above - ANSWER a and b
Surveys produced by Robert Morris Associates are useful in
Select one:
a. qualitative analysis
b. quantitative analysis
c. neither A nor B - ANSWER quantitative analysis
Accurate forecasts that can be backed up with considerable detail are worthless if they
do not come close to actual reality.
Choose one:
,a. TRUE
b. FALSE - ANSWER TRUE
By choosing the proportions of debt and equity in an optimal manner, the manager is
able to add value to the firm.
Choose one:
a. TRUE
b. FALSE - ANSWER TRUE
Management has two ways in which it can create value for the firm through components
on either side of the accounting identity.
Choose one:
a. TRUE
b. FALSE - ANSWER TRUE
If stockholders believe that the financial risk of a firm has fallen and everything else is
held constant, then the price of the stock will likely increase.
Choose one:
a. TRUE
b. FALSE - ANSWER TRUE
Compounding is the reverse of discounting.
Choose one:
a. TRUE
b. FALSE - ANSWER TRUE
The discount factor which can be used in the present value calculation is the rate of
return about which one is certain that a particular individual can achieve.
Select one:
, a. TRUE
b. FALSE - ANSWER TRUE
Greater risk should be rewarded with a greater return.
Select one:
a. TRUE
b. FALSE - ANSWER TRUE
To evaluate the present value of a future cash flow you would Select one:
a. discount the cash flow back to the present.
b. compound the cash flow to the future.
c. discount the cash flow one year into the future.
d. A and C. - ANSWER discount the cash flow back to the present
Value is added to the firm when
Select one:
a. earnings are enhanced.
b. financial risks are reduced.
c. A and B.
d. none of the above. - ANSWER a and b
Tax consequences of the capital gain on the sale of the old asset is
Select one:
a. A cost
b. A benefit
c. Neither A nor B - ANSWER a cost
