Devry FIN 382 Week 5 Quiz
Question 1.(TCO 6) Book value is of limited use to the investment analyst because it is based on
- book numbers.
- actual numbers.
- historical numbers.
- forecasted numbers.
Question 2.(TCO 4) Some employees prefer restricted stock over options because they receive
- actual shares of stock.
- preferred stock only.
- a higher stock value.
- All of the above
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Question 3. (TCO 6) What is the effect of the exercise of stock options?
- They generate cash to the issuing firm, thereby increasing profit per share.
- They are an expense at the time of exercise. This lowers net income.
- They increase debt and lower borrowing capacity but have no effect on profit.
- They increase the numbers of shares outstanding.
Question 4. (TCO 6) Which of the following could cause return on assets to decline when net profit margin is increasing?
- Sale of investments at year-end
- Purchase of a new building at year-end
- Decline in book value
- Increased turnover of operating assets
- A stock split
Question 5 (TCO 5) Which of the following best indicates that a firm carries excess inventory?
- A decline in sales
- A decline in the current ratio
- Stable current ratio with declining quick ratios
- A rise in total asset turnover
