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Question
Which of the following statements is correct?
a. In the text, depreciation is regarded as a use of cash because it reduces fixed assets, which then must be replaced.
b. If a company uses some of its cash to pay off short-term debt, then its current ratio will always decline, given the way the ratio is calculated, other things held constant.
c. During a recession, it is reasonable to think that most companies' inventory turnover ratios will change while their fixed asset turnover ratios will remain fairly constant.
d. During a recession, we can be confident that most companies' DSOs (or ACPs) will decline because their sales will probably decline.
e. Each of the above statements is false.
Answer
This answer is hidden. It contains 1 characters.
Related questions
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Because an investor borrowing funds for margin trading pays a fixed rate to borrow funds from his broker, the margin trading returns are magnifies the returns on the assets value.
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b. $200,000
c. $500,000
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Refer to Foxy Ladies Investment Club. What was the portfolio's geometric average return per year from 2010 through 2012?
a. 20.0%
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Q:
Refer to Foxy Ladies Investment Club. What was the portfolio's simple arithmetic average return per year from 2010 through 2012?
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Q:
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Q:
The simple arithmetic average return for the common stock of Saltwater Expeditions Incorporated for the eight-year period from 2005 through 2012 was 21 percent. The one-year holding period returns from 2005 through 2011 are given below. What is the implied one-year holding period return for 2012?
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2006 22
2007 25
2008 20
2009 38
2010 25
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b. $26.25
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A stock purchased for $52 paid a dividend of $1 six days after it was purchased. The stock was sold for $51 ninety days after it was purchased. What is the annualized rate of return? Assume the dividend was not reinvested.
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Q:
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a. True
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a. True
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Q:
Use the information below to solve for the earnings per share for Adobe.
52 Weeks Yld Vol Net
Hi Lo Stock Sym % PE 100s Hi Lo Close Chg
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Q:
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Temporary current assets are assets used specifically to finance particular projects in the firm's capital budget.
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b. False
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Net working capital is defined as
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Q:
The cash conversion cycle is the length of time from
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b. the payment of accrued wages to manufacture a product until the collection of accounts receivable associated with the sale of that product.
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Reston Inc. has expected sales of $17,000,000. While 10 percent of its customers pay cash, the remaining 90 percent pay on credit with 40 percent paying on Day 10, 30 percent paying on Day 20, 15 percent paying on Day 25, and 15 percent paying on Day 30. Assume that the cost of funds invested in receivables is 10 percent. Suppose that the firm's customers begin paying later, such that the new DSO increases to 24 days, that the firm uses a 360-day year, and that the firm's variable cost ratio is 80 percent. What is the additional interest cost to Reston of the additional investment in A/R caused by the delay in payment by its customers? a. $19,550 b. $24,438 c. $42,500 d. $78,625 e. $102,000
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Q:
A firm purchases raw materials on June 1st. It converts the raw materials into inventory by the last day of the month, June 30th. However, it pays for the materials on June 15th. On July 31st, it sells the finished goods inventory. Then the firm collects cash from the sale one month later on August 31st. If this sequence accurately represents the firm's average working capital cycle, what is the firm's cash conversion cycle in days?
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