Net income is the best measure to use for evaluating a firm's profits on assets because it includes
the effect of financing as well as the effect of operations.
Indicate whether the statement is true or false
FALSE
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Assume that the bond market is in equilibrium. The current interest rate on one-year bonds is 5 percent, the interest rate on one-year bonds, one year from now is 6 percent, and in two years the interest rate on one-year bonds will be 6.5 percent. Assume that there is no term premium on a one-year bond. If the term premium equals 0.5 percent × the number of years to maturity, for two-year bonds and three-year bonds. The interest rate today on the two-year bond is ____ and the interest rate today on a three-year bond is ____.
A. 5.5 percent; 5.8 percent B. 6.0 percent; 6.3 percent C. 6.2 percent; 6.8 percent D. 6.5 percent; 7.3 percent
Why is the use of the U.S. dollar as a unit of measure for financial statement data in the U.S. widely accepted?
a. U.S. dollar remains stable over a long period of time. b. U.S. dollar is universally recognized as a reliable financial measure. c. U.S. dollar is the medium of monetary exchange in the U.S. d. U.S. dollar is required for financial statement presentation by the FASB and SEC.
A(n) ______ disconfirming response involves sending messages with multiple or unclear messages.
A. tangential B. endorsement C. ambiguous D. impervious
In order to build relationships with customer value, firms must do all of the following EXCEPT
A. brief their advertising people to develop ads that try to convince a customer to buy once. B. ensure that everyone in a firm works together to provide customer value before and after each purchase. C. try to eliminate costs that do not give value to customers. D. try to adopt the marketing concept. E. attract customers in the first place-and keep them satisfied after they buy.