Which of the following occurs as the level of service decreases?
A) Cost of waiting time decreases, and cost of providing service decreases.
B) Cost of waiting time decreases, and cost of providing service increases.
C) Cost of waiting time increases, and cost of providing service decreases.
D) Cost of waiting time increases, and cost of providing service increases.
E) Cost of waiting time first decreases, then increases; while cost of providing service decreases.
C
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On March 31, 2015, the Turi Company purchased a two-year fire insurance policy. Turi recorded the purchase by debiting Prepaid Insurance and crediting Cash for $10,000. Which of the following adjusting entries should Turi prepare at the end of 2015?
A) Prepaid Insurance 3,750Insurance Expense 3,750 B) Insurance Expense 3,750Prepaid Insurance 3,750 C) Prepaid Insurance 5,500Insurance Expense 5,500 D) Insurance Expense 5,000Prepaid Insurance 5,000
Joseph, Inc uses the accrual basis of accounting. Joseph's insurance expense account had a $23,000 balance at the end of the year. The prepaid insurance account had a $6,000 balance at the beginning of the year and a $3,000 balance at the end of the year. How much cash was paid for insurance during the year?
A) $4,000 B) $20,000 C) $21,000 D) $29,000
Gamma Company and Chi Company are similar and similar-sized companies operating in the same industry. At the end of the most recent year, Gamma's price-earnings ratio was 22.0, and Chi's price-earnings ratio was 14.2. What conclusion would you draw based on the difference in price-earnings ratios for the two companies?
What will be an ideal response?
Which of the following is NOT a necessary step in the DISCOUNTED CASH FLOW ANALYSIS method of valuing equity?
A) Estimate a cost of capital. B) Estimate the present value of terminal value cash flows. C) Calculate the present value of free cash flows over the number of years in question. D) All of the above are necessary steps for the discounted cash flow method of valuation.