Which of the following statements about the Homeowners 3 policy is (are) true? I. Losses to the dwelling are always settled on an actual cash value basis. II. Coverage on personal property is limited to $5,000
A) I only
B) II only
C) both I and II
D) neither I nor II
Answer: D
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A gain on the sale of a plant asset in the ordinary course of business should be presented in a statement of cash flows prepared using the indirect method as
a. a cash inflow from investing activities. b. a cash inflow from financing activities. c. a deduction from net income. d. an addition to net income.
In a typical (conservative assumptions) after-tax discounted cash flow analysis, depreciation expense is assumed to accrue at
a. the beginning of the period. b. the middle of the period. c. the end of the period. d. irregular intervals over the life of the investment.
Which of the following statement concerning Treasury bonds is true?
A) They are priced and sold at auction. B) Interest accumulates and is paid out at maturity. C) They are more risky than comparable maturity private bonds. D) They have higher rates than comparable municipal bonds.
Duffert Industries has total assets of $1,050,000 and total current liabilities (consisting only of accounts payable and accruals) of $150,000. Duffert finances using only long-term debt and common equity. The interest rate on its debt is 9% and its tax rate is 40%. The firm's basic earning power ratio is 15% and its debt-to capital rate is 40%. What are Duffert's ROE and ROIC? Do not round your intermediate calculations.
A. 9.04%; 8.93% B. 11.26%; 9.14% C. 12.65%; 10.19% D. 13.90%; 10.50% E. 16.12%; 11.66%