Finance Answers

Each of the following is a liquidity ratio except the

acid-test ratio.

current ratio.

inventory turnover.

debt to total assets ratio.

Vertical analysis is a technique which expresses each item within a financial statement

a.in dollars and cents.
b.in terms of a percentage of the item in the previous year.
c.in terms of a percent of a base amount.
d.starting with the highest value down to the lowest value.

Under which of the following cases may a percentage change be computed?

The trend of the balances is decreasing but all balances are positive.

There is no balance in the base year.

There is a negative balance in the base year and a positive balance in the subsequent year.

There is a positive balance in the base year and a negative balance in the subsequent year.

A stockholder is interested in the ability of a firm to

pay consistent dividends.

appreciate in share price.

survive over a long period.

all of these.

Which one of the following is primarily interested in the liquidity of a company?

Short-term creditors

Federal government

Long-term creditors

Stockholders

Corporations invest in other companies for all of the following reasons except to
A. Generate earnings
B. house excess cash until needed
C. Increase trading of the other companies' stock
D. Meet strategic goals

Determine the size of the M1 money supply using the following
information.
Currency plus traveler’s checks $25 million
Negotiable CDs $10 million
Demand deposits $13 million
Other checkable deposits $12 million

Chris is planning for her son's college education to begin five years from today. She estimates the yearly tuition, books, and living expenses to be $5,000 per year for a four-year degree. How much must Chris deposit today, at an interest rate of 8 percent, for her son to be able to withdraw $5,000 per year for four years of college?

A. $11,277
B. $13,620
C. $20,000
D. $39,520

your taxable income is $20,900. your total exemptions are $2,000. how much will you pay in state tax?

The One Product economy, which produces and sells only
personal computers (PCs), expects that it can sell 500 more, or 12,500
PCs, next year. Nominal GDP was $20 million this year, and the
money supply was $7 million. The central bank for the One Product
economy plans to increase the money supply by 10 percent next year.

a. What was the average selling price for the personal computers
this year?
b. What is the expected average selling price next year for
personal computers if the velocity of money remains at this
year’s turnover rate? What percentage change in price level is
expected to occur?
c. If the objective is to keep the price level the same next year
(i.e., no inflation), what percentage increase in the money
supply should the central bank plan for?
d. How would your answer in (c) change if the velocity of money
is expected to be three times next year? What is it now?