Busn 379 Week 4 Midterm Exam

BUSN 379 Week 4 Midterm Exam

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BUSN 379 Week 4 Midterm Exam

1. (TCO 1) What is the goal of financial management for a sole proprietorship? (Points : 3)

decrease long-term debt to reduce the risk to the owner

maximize net income given the resources of the firm

maximize the market value of the equity

minimize the tax impact on the proprietor

minimize costs and increase production

2. (TCO 1) Working capital management includes which of the following? (Points : 3)

establishing the inventory level

deciding when to pay suppliers

determining the amount of cash needed on a daily basis

establishing credit terms for customers

all of the above

3. (TCO 1) Market value reflects which of the following: (Points : 3)

The amount someone is willing to pay today for an asset.

The value of the asset based on generally-accepted accounting principles.

The asset’s historical cost.

A and B only

None of the above

4. (TCO 1) Which of the following is true regarding income statements? (Points : 3)

It shows the revenue and expenses, based upon selected accounting methods.

It reveals the net cash flows of a firm over a stated period of time.

It reflects the financial position of a firm as of a particular date.

It records revenue only when cash is received for the product or service provided.

It records expenses based on the recognition principle

5. (TCO 1) Tato’s Pizza has sales of $625,000. They paid $43,000 in interest during the year and depreciation was $79,000. Administrative costs were $100,000 and other costs were $160,000. Assuming a tax rate of 35 percent, what is Tato’s Pizza net income?

(Points : 3)

$157,950

$322,000

$243,000

$200,000

6. (TCO 1) Home Best Hardware had $315,000 in taxable income last year. Using the tax rates provided in Table 2.3, what is the marginal tax rate?(Points : 3)

35%

39%

34%

32%

7. (TCO 1) Pizza A...