01/25/15 Flashcards
WHEN THE RISKS OF A PROJECTS CASH FLOWS ARE DIFFERENT, AN ACCEPTABLE VALUATION TECHNIQUE IS TO????
DISCOUNT EACH CASH FLOW USING A DISCOUNT RATE THAT REFLECTS THE DEGREE OF RISK.
THE ACKNOWLEDGED PREVENTATIVE MEASURE IN A PERIOD OF DEFLATION IS TO ???
INCREASE $$$$$$$ SUPPLY
——DEMAND IS A SCHEDULE OR CURVE THAT SHOWS CONSUMERS DEMANDED OUTPUT OR REAL GDP AT EVERY PRICE LEVEL
AGGREGATE DEMAND
COSO has defined the five components of an internal control as follows:
The Control Environment: The tone of the organization related to control. This component is the basis for the other four elements. Without a workforce dedicated to proper controls, no internal control program will work effectively.
Risk Assessment: A company’s identification, analysis, and management of risks related to the fair presentation of the organization’s financial statements.
Information and Communication: The systems (policies and procedures) used to accurately identify, record, and report transactions in an effective and timely manner.
Control Activities: The policies and procedures put in place by management to minimize the risks involved in management’s accomplishment of the company’s stated goals and objectives.
Monitoring Activities: The assessment of the quality and effectiveness of the firm’s internal control procedures.
COSO has defined the five components of an internal control as follows:
THE PAYBACK METHOD, TIME ADJUSTED ROR, AND ACCOUNTING ROR ARE ALL CAPITAL BUDGETING PROJECT SCREENING METHODS. THE ONLY ONE THAT IS A PROJECT RANKING METHOD IS ??????
PROFITABILITY INDEX….
THERE ARE NO RESTRICTIONS AS TO THE TYPE OF CORPORATION THAT CAN ISSUE IS NOT AN ADVANTAGE TO A CORPORATION THAT USES???
SHORT TERM FINANCING…..
When the risks of the individual components of a project’s cash flows are different, an acceptable procedure to evaluate these cash flows is to:
discount each cash flow using a discount rate that reflects the degree of risk.
the basic purpose of the letter of credit is to reduce risk to the ????
exporter
national income is GDP - DEPRECIATION-INDIRECT TAXES
NATIONAL INCOME
WHEN A CORPORATION HAS EXCESS PROFITS…..PARTICIPATING PREFERED STOCK ACTS MORE LIKE EQUITY THAN CUMULATIVE PREFERRED STOCK
STUDYING ALL WEEKEEND SUCKS!
A slower rate of growth in income relative to other countries, which causes imports to lag behind exports
CAUSES CURRENCY TO APPRECIATE
EFFECTIVE INTEREST RATE IS THE ANNUAL RATE OF INTEREST/THE LOAN BALANCE AVAILABLE TO THE ???
BORROWER
If a firm borrows $250,000 but is required to maintain $50,000 as a minimum compensating balance, then the firm only has use of $200,000, but is paying 6% interest on the entire $250,000. To determine the effective interest rate, the interest in dollars ($250,000 × 6%, or $15,000) should be divided by the amount of the loan available to the borrower, the effective loan amount, which is only $200,000.
effective interest rate calc
TOTAL SHE / # SHARES OUT
BOOK VALUE PER SHARE
