comm 203 Flashcards
Who actually controls a firm?
a.Control of the firm ultimately rests with the board of directors. They elect the management, who lead the company.
b. Control of the firm rests with government agencies and regulatory bodies working in unison with the board of directors.
c. Control of the firm rests with the executives that oversea the strategic planning.
d.Control of the firm rests with regulatory bodies working in unison with executives.
e. Control of the firm ultimately rests with shareholders. They elect the board of directors, who then hire and fire management.
d. Control of the firm ultimately rests with shareholders. They elect the board of directors, who then hire and fire management.
Bob is a member of ACME Corporation’s senior management team, and he is responsible for tax, cost & financial accounting, and information technology. What is Bob’s most likely job title?
a.Director.
b.Corporate Treasurer.
c.Chairman of the Board.
d.Vice President of Operations.
e. Corporate Controller.
Corporate Controller.
Harry died earlier this year but his company was not automatically dissolved by his death. Which type(s) of organization was it?
a.Corporation.
b.Partnership.
c.Sole proprietorship.
d.Limited proprietorship.
e.Hybrid partnership.
a.Corporation.
With respect to Canadian exchanges where Canadian company shares are traded, where can we find the largest daily dollar amount of trading?
a.On the TSX.
b.On the NYSE.
c.In primary markets.
d.Over the counter.
e.On the Venture Exchange.
a.On the TSX.
What is the #1 purpose of an auction market like the TSX?
a.Handle private placements of shares of stock.
b.Provide electronic trading for dealers.
c.Offer new shares of stock to the general public.
d.Provide a market place for dealers.
e.Match buyers with sellers.
e.Match buyers with sellers.
Managers who place the interest of the shareholders first will tend to:
a.Be in greater demand and receive higher compensation.
b.Be replaced on a routine basis.
c.Decline all offers to buy the firm.
d.Realize minimal value from the stock options they are granted.
e.Reward employees for unethical behavior if that behavior increases the firm’s net income.
a.Be in greater demand and receive higher compensation.
For the most recent period, Moosomin Cranberry Farms had Operating Cash Flow of $400, a change in NWC of $300 and cash flow from assets was equal to $320. Calculate net capital spending.
a.$(170)
b.$170
c.$150
d.$220
e.$(220)
e.$(220)
q8 on paper 1st exam
$129
Exactly 6 years prior to today International Knitting Yarn Wholesalers bought a specialized piece of equipment for $368,000, which has a current balance sheet value of $172,200. The current market value of the equipment is $211,400. The company has one fixed asset. Net working capital is $121,000 and long-term debt is $82,500. What is the book value of shareholders’ equity?
a.$89,700
b.$249,900
c.$406,500
d.$211,400
e.$210,700
e.$210,700
Mervin, a permanent resident of the country of Ostralia, is about to calculate his federal income tax owing. Provincial tax rates are 16% on the first $40,100; 20% on the next $40,100; and 24% on any income after that. Income for the year was $95,000. What is Mervin’s marginal provincial tax rate?
a.20.50%
b.24.00%
c.18.93%
d.20.93%
e.18.50%
b.24.00%
Eric, a day trader, recently said that “There’s not much benefit to examining financial statements for a company. With all of news, commentary, video, and whatever else that’s available online, why bother reading spreadsheets with income, balance sheets, and whatnot. That is just boring accounting that will have very little impact on my decisions” You respond by saying that “Even with all of this information available, the reason that we still examine financial statements carefully is to ___________.”
a.Determined if they adhere to GAAP.
b.Consider what went wrong.
c.Maintain consistency.
d.Attain precise and accurate data of the company.
e.Extract key information for future decision making.
e.Extract key information for future decision making.
Which one of the following statements concerning net working capital is correct?
a. Depreciation must be added back to current assets when computing the change in net working capital.
b.The change in net working capital is equal to current assets minus current liabilities.
c.Net working capital is a part of the operating cash flow.
d.Net working capital is equal to long-term assets minus long-term liabilities.
e.The greater the net working capital, the greater the ability of a firm to meet its short-term obligations.
e.The greater the net working capital, the greater the ability of a firm to meet its short-term obligations.
Sammi runs an ultra-small grocery company where he sells the garden produce that he grows in his parents’ back yard. For the past year Sammi’s financial information is as follows:
Tax rate = 30%; times interest earned = 10.75 times; sales = $4,500; cost of goods sold = $1,600; general and administrative (delivery) expenses = $750.
What was Sammi’s net income for the year?
