Bus 401 Week 1 Quiz Uop Exam Assignment

BUS 401 Week 1 Quiz

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1. The income statement for Brit, Inc. Indicates that tax expense was $20,000. The balance sheet indicates that taxes payable for the same year increased by $ 5,000. What amount did Brit, Inc. actually pay in taxes during this year?

1. $ 15,000

2. $ 20,000

3. $ 25,000

4. Cannot be determined without the cash balance

2. A financial manager is considering two projects, A and B. A is expected to add $ 2 million to profits this year while B is expected to add $ 1 million to profits this year. Which of the following statements is most correct?

1. The manager should select project A because it maximizes profit.

2. The manager should select the project that maximizes long-term profits, not just one year of

3. The manager should select project A or he is irrational.

4. which could be A or B.

3. Which of the following statements about depreciation is true?

1 .Depreciation is a noncash expense, but it is important because it affects a corporation’s tax

2. Depreciation must be calculated the same way for financial reporting and tax purposes

3. The choice of depreciation method had no impact on a firm\'s value because the same amount of depreciation is taken over the life of an asset regardless of the method used

4. A shareholder wealth maximizing corporation prefers to defer depreciation expense in order to increase current reported profits.

4. The principle of risk-return tradeoff means that _____

1. Higher risk investments must earn higher returns.

2. An investor who takes more risk will earn a higher return

3. A rational investor will only take on a higher risk if he expects a higher return....