If the indirect method is used, which of the following would be added to net income to arrive at net cash flows from operating activities?
A) Increase in Inventory.
B) Decrease in Prepaid Expenses.
C) Decrease in Accounts Payable.
D) Increase in Accounts Receivable.
B
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The owner of 100 shares of stock of a corporation with 1,000 shares of stock outstanding has a 10% interest in the total stockholders' equity. If a 30% stock dividend is declared and distributed, that stockholder would own what percentage of interest in the corporation?
a. 100; b. 40; c. 30; d. 13; e. 10
Which of the following is a positive aspect of a competitor-centered company?
A) It carries out its own customer relationship strategy. B) It bases its own moves on competitors' moves. C) It searches out competitors' weaknesses. D) It concentrates its resources on delivering superior value to target customers. E) It ends up seeking innovative ways to create more value for customers.
Under the Leahy-Smith America Invents Act signed into law in 2011:
a. a patent will be awarded to the first inventor to file an application for the invention. b. a patent will be awarded to the first person to create an invention. c. patents granted after January 2012 may be renewed for one additional term. d. the patent application process will be more complicated, but it will harmonize the U.S. system with systems commonly used in other countries with which the U.S. trades.
Sunshine Inc. has two equally-sized divisions. Division A has a beta of 0.8 and Division B has a beta of 1.2. The company is 100% equity financed. The risk-free rate is 6% and the market risk premium is 5%. Sunshine assigns different hurdle rates to each division based on each division's market risk. Which of the following statements is CORRECT?
A. Sunshine's composite WACC is 10%. B. Division B has a lower WACC than Division A. C. If the same WACC is used for each division, the firm would select too many Division A projects and reject too many Division B projects. D. If the same WACC is used for each division, the firm would select too many Division B projects and reject too many Division A projects. E. Sunshine's composite WACC is 12%.