Which of the following statements is not correct?
a. A ratio that indicates a firm's long-term, debt-paying ability from the income statement view is the times interest earned.
b. Some of the items on the income statement that are excluded in order to compute times interest earned are interest expense, income taxes, and unusual or infrequent items.
c. Capitalized interest should be included with interest expense when computing times interest earned.
d. Usually, the highest times interest coverage in the most recent five-year period is used as the primary indication of the interest coverage.
e. In the short run, a firm can often meet its interest obligations, even when the times interest earned is less than 1.00.
D
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Increasing the efficiency of necessary activities by using economies of scale is known as:
A) activity elimination B) activity sharing C) activity reduction D) activity selection
A _______ is a court decision that determines the decision in a subsequent, similar case
A) stare decisis B) precedent C) statute D) code
If data for a time series analysis is collected on an annual basis only, which pattern does not need to be considered?
a. trend b. seasonal c. cyclical d. horizontal
Billy and Sue are married and live in Texas, a community property state. They jointly own real property with an adjusted basis of $200,000. When the property has a FMV of $450,000, Billy dies leaving all of the property to Sue. If she later sells the property for $650,000, what is Sue's gain on the sale?
A. $450,000 B. $225,000 C. $200,000 D. $325,000