Question 1

Name five examples of finance and accounting decisions that may require policies.

Accepted Answer

Possible answers include: 1) To raise ca

Question 2

Financial ratios are an important tool used to access a firm's financial situation

Accepted Answer

A)  over a period of time. 
B)  at one point in time. 
C)  on a yearly basis. 
D)  on a monthly basis. 
E)  over time. 
A)  over a period of time. 
B)  at one point in time. 
C)  on a yearly basis. 
D)  on a monthly basis. 
E)  over time.

Question 3

A reason for concern about the dilution of ownership is the possibility of hostile takeover.

Accepted Answer

A) True 
 B)False

Question 4

If an initial stock issuance is $800,000, what would be the expected cost paid to lawyers, accountants, and underwriters, based on the average for IPOs in this range?

Accepted Answer

A)  $20,000 
B)  $40,000 
C)  $80,000 
D)  $200,000 
E)  $400,000 
A)  $20,000 
B)  $40,000 
C)  $80,000 
D)  $200,000 
E)  $400,000

Question 5

Which of the following is NOT an accepted approach for determining a business's worth?

Accepted Answer

A)  The Net Worth Method 
B)  The Net Income Method 
C)  The Return on Investment Method 
D)  The Price-Earnings Ratio Method 
E)  The Outstanding Shares Method 
A)  The Net Worth Method 
B)  The Net Income Method 
C)  The Return on Investment Method 
D)  The Price-Earnings Ratio Method 
E)  The Outstanding Shares Method

Question 6

A popular way for a company to raise capital is to issue corporate bonds.

Accepted Answer

A) True 
 B)False

Question 7

Although acquiring needed capital can be an important task, it is not seen as central to strategy implementation.

Accepted Answer

A) True 
 B)False

Question 8

What is the meaning of the term "going public"? Explain the important issues involved in deciding whether to go public. Include cost estimates, advantages and disadvantages.

Accepted Answer

Going public means selling off a percent

Question 9

Bonds are a good way to raise capital when a company's credit rating is not very good.

Accepted Answer

A) True 
 B)False

Question 10

The percentage-of-sales method should be used for projecting the cost of goods sold in the income statements.

Accepted Answer

A) True 
 B)False

Question 11

Recording revenue prematurely understates profits.

Accepted Answer

A) True 
 B)False

Question 12

After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph?

Accepted Answer

A)  Debt appears to be the best financing alternative. 
B)  Stock would be the best financing alternative. 
C)  A combination of debt and stock is probably the best financial alternative. 
D)  Dividends must be considered before conclusions can be made. 
E)  The company should be privately owned. 
A)  Debt appears to be the best financing alternative. 
B)  Stock would be the best financing alternative. 
C)  A combination of debt and stock is probably the best financial alternative. 
D)  Dividends must be considered before conclusions can be made. 
E)  The company should be privately owned.

Question 13

The only costs involved in going public are the initial costs.

Accepted Answer

A) True 
 B)False

Question 14

All items on the income statement can be forecasted using the percentage-of-sales method.

Accepted Answer

A) True 
 B)False

Question 15

The other name for operating income is

Accepted Answer

A)  net income. 
B)  earnings-per-share. 
C)  earnings-before-interest-and-taxes. 
D)  gross margin. 
E)  return on assets. 
A)  net income. 
B)  earnings-per-share. 
C)  earnings-before-interest-and-taxes. 
D)  gross margin. 
E)  return on assets.

Question 16

Determining an appropriate mix of debt and equity in a firm's capital structure is an important strategy-________ decision.

Accepted Answer

A)  formulation 
B)  implementation 
C)  analysis 
D)  development 
E)  evaluation 
A)  formulation 
B)  implementation 
C)  analysis 
D)  development 
E)  evaluation

Question 17

In the context of a balance sheet, goodwill represents

Accepted Answer

A)  a premium paid over the book value for an acquisition. 
B)  the value attached to a firm's reputation. 
C)  the excess of assets over liabilities. 
D)  the value associated with benefits from environmental programs. 
E)  the excess of current assets over liabilities. 
A)  a premium paid over the book value for an acquisition. 
B)  the value attached to a firm's reputation. 
C)  the excess of assets over liabilities. 
D)  the value associated with benefits from environmental programs. 
E)  the excess of current assets over liabilities.

Question 18

Explain briefly how EPS is different from EBIT.

Accepted Answer

While both EPS and EBIT are accounting t

Question 19

Shares outstanding is the same as treasury stock.

Accepted Answer

A) True 
 B)False

Question 20

Which one of the following statements regarding stock issuances is true?

Accepted Answer

A)  They are not always better than debt for raising capital. 
B)  Their effect on stock price is not a concern. 
C)  They do not require a company to share future earnings with new shareholders. 
D)  Dilution of ownership is not a special concern. 
E)  Issuing stock when interest rates are low is a sound strategy. 
A)  They are not always better than debt for raising capital. 
B)  Their effect on stock price is not a concern. 
C)  They do not require a company to share future earnings with new shareholders. 
D)  Dilution of ownership is not a special concern. 
E)  Issuing stock when interest rates are low is a sound strategy.

Name five examples of finance and accounting decisions that may require policies.

Financial ratios are an important tool used to access a firm's financial situation

A reason for concern about the dilution of ownership is the possibility of hostile takeover.

If an initial stock issuance is $800,000, what would be the expected cost paid to lawyers, accountants, and underwriters, based on the average for IPOs in this range?

Which of the following is NOT an accepted approach for determining a business's worth?

A popular way for a company to raise capital is to issue corporate bonds.

Although acquiring needed capital can be an important task, it is not seen as central to strategy implementation.

What is the meaning of the term "going public"? Explain the important issues involved in deciding whether to go public. Include cost estimates, advantages and disadvantages.

Bonds are a good way to raise capital when a company's credit rating is not very good.

The percentage-of-sales method should be used for projecting the cost of goods sold in the income statements.

Recording revenue prematurely understates profits.

After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph?

The only costs involved in going public are the initial costs.

All items on the income statement can be forecasted using the percentage-of-sales method.

The other name for operating income is

Determining an appropriate mix of debt and equity in a firm's capital structure is an important strategy-________ decision.

In the context of a balance sheet, goodwill represents

Explain briefly how EPS is different from EBIT.

Shares outstanding is the same as treasury stock.

Which one of the following statements regarding stock issuances is true?

The Nature of Strategic Management

The Business Vision and Mission

The External Assessment

The Internal Assessment

Strategies in Action

Strategy Analysis and Choice

Implementing Strategies: Management and Marketing Issues

Strategy Evaluation and Governance

Business Ethics, Environmental Sustainability, and Social Responsibility

Global and International Issues

Filters

Exam 8: Implementing Strategies: Finance and Accounting Issues

Name five examples of finance and accounting decisions that may require policies.

Financial ratios are an important tool used to access a firm's financial situation

A reason for concern about the dilution of ownership is the possibility of hostile takeover.

If an initial stock issuance is $800,000, what would be the expected cost paid to lawyers, accountants, and underwriters, based on the average for IPOs in this range?

Which of the following is NOT an accepted approach for determining a business's worth?

A popular way for a company to raise capital is to issue corporate bonds.

Although acquiring needed capital can be an important task, it is not seen as central to strategy implementation.

What is the meaning of the term "going public"? Explain the important issues involved in deciding whether to go public. Include cost estimates, advantages and disadvantages.

Bonds are a good way to raise capital when a company's credit rating is not very good.

The percentage-of-sales method should be used for projecting the cost of goods sold in the income statements.

Recording revenue prematurely understates profits.

After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph?

The only costs involved in going public are the initial costs.

All items on the income statement can be forecasted using the percentage-of-sales method.

The other name for operating income is

Determining an appropriate mix of debt and equity in a firm's capital structure is an important strategy-________ decision.

In the context of a balance sheet, goodwill represents

Explain briefly how EPS is different from EBIT.

Shares outstanding is the same as treasury stock.

Which one of the following statements regarding stock issuances is true?

The Nature of Strategic Management

The Business Vision and Mission

The External Assessment

The Internal Assessment

Strategies in Action

Strategy Analysis and Choice

Implementing Strategies: Management and Marketing Issues

Strategy Evaluation and Governance

Business Ethics, Environmental Sustainability, and Social Responsibility

Global and International Issues

Filters