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1
An income statement reflects a firm's assets and liabilities as of a particular point in time.
A)True
B)False
2
Any item of value which is owned by a firm is called an asset.
A)True
B)False
3
The term "EFN" stands for "electronic funds network".
A)True
B)False
4
The quarterly financial statements filed with the SEC are referred to as the:
A)FD reports.
B)EDGAR reports.
C)10K.
D)10Q.
E)10FD.
5
Merrilee Cleaners stock is valued at $34 a share. The firm has 75,000 shares outstanding. What is the value of the shareholder's equity if the price to book ratio is 3.20?
A)$630,130
B)$708,010
C)$796,875
D)$815,006
E)$825,000
6
Stewart and Scott Enterprises had a financing cash flow of -$84,000 and an investing cash flow of -$21,000 for the year. The beginning cash balance was $54,000 and the ending cash balance was $28,000. What is the operating cash flow for the period?
A)$74,000
B)$79,000
C)$89,000
D)$121,000
E)$131,000
7
You have compiled the following financial information on your company:
Net income$211,000
Repayment of debt48,000
Dividend payments2,500
Depreciation7,500
Purchase of new equipment109,000
Sale of old equipment27,000

Given this information, the financing cash flow is _____ and the investment cash flow is _____.

A)-$58,000; -$109,000
B)-$58,000; -$82,000
C)-$50,500; -$109,000
D)-$50,500; -$82,000
E)-$48,000; -$82,000
8
A partial balance sheet for a firm is as follows:
Long-term debt$ 8,600
Inventory8,400
Accounts payable9,100
Total equity16,700
Accounts receivable6,100
Net fixed assets15,700

How much cash does the firm have if that is the only remaining balance sheet account?

A)$1,200
B)$2,800
C)$4,200
D)$5,800
E)$7,200
9
Assume that a firm uses the percentage of sales approach with all assets, expenses, current liabilities, and retained earnings varying with sales. Given this, the external financing need (EFN) will be equal to the change in:
A)total assets minus the change in current liabilities plus the addition to retained earnings.
B)total assets.
C)total assets minus the change in current liabilities minus the addition to retained earnings.
D)total assets minus the change in current liabilities.
E)current liabilities minus the change in retained earnings plus the change total assets.
10
A firm has net income this year of $26,000. The tax rate is 35 percent and the interest expense is $2,000. The tax rate and the interest expense are expected to remain constant for next year. All other expenses are expected to vary with sales. Sales for this year are $500,000 and are expected to increase by 5 percent next year. What is the projected net income for next year?
A)$24,298
B)$25,033
C)$27,365
D)$28,109
E)$28,467





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