61) The conversion price (for a convertible security) is usually adjusted __________.
A. for a new debt offering.
B. for stock splits.
C. for cash dividends.
D. all of these
62) Which (if any) statement is false?
A. The Principle of Self-Interested Behavior suggests that self-interested capital market transactions force market prices toward being fair prices.
B. The Principle of Two-Sided Transactions states that intense capital market competition to get and use information to take advantage of arbitrage opportunities eliminates such opportunities.
C. The Principle of Signaling states that information in the transactions of others can be valuable, such as providing an accurate measure of current market value, or information about expected future value.
D. none of these answers are correct.
63) Which of the following is (are) true?
A. The Principle of Capital Market Efficiency states that differences between financial assets are measured primarily in terms of risk and return. Investors choose the highest return for a given risk level.
B. The Principle of Comparative Advantage states that people apply the Principles of Self-Interested Behavior, Two-Sided Transactions, and Signaling to an environment characterized by similar financial assets, low transaction costs, and intense competition leads to capital market efficiency.
C. The Principle of Valuable Ideas states that new ideas can provide value when first introduced, even in an efficient capital market.
D. all of these answers are correct.
64) Which of the following is (are) true?
A. The Principle of Capital Market Efficiency states that differences between financial assets are measured primarily in terms of risk and return. Investors choose the highest return for a given risk level.
B. The Principle of Comparative Advantage states that people apply the Principles of Self-Interested Behavior, Two-Sided Transactions, and Signaling to an environment characterized by similar financial assets, low transaction costs, and intense competition leads to capital market efficiency.
C. The Principle of Valuable Ideas states that new ideas can provide value when first introduced, even in an efficient capital market.
D. all of these answers are correct.
65) A transfer price exists when two segments of the same organization sell _____.
A. the same service to competitors
B. a product in a foreign country
C. a service to each other
D. a product to the same customer
66) Incremental analysis would be appropriate for
A. acceptance of an order at a special price.
B. a retain or replace equipment decision.
C. a sell or process further decision.
D. all of the answers are correct.
67) Undertaker Corporation has a joint process that produces three products: P, G, and A.
Each product may be sold at split-off or processed further and then sold. Joint processing
costs for a year amount to $25,000. Other relevant data are as follows:
Processing
Sales Value Costs after Sales Value
Product at Split-off Split-off at Completion
P $62,000 $5,000 $88,000
G 12,500 6,500 19,000
A 9,400 5,000 12,000
Product G _____.
A. an be processed further or sold at split off; there is no difference in profit.
B. should be processed further to increase profits by $19,000.
C. should be sold at split off since processing further would only reduce profits by $6,500.
D. should be processed further to increase profits by $6,500.
68) It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 2,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 2,000 scales. If the special order is accepted, what will be the effect on net income?
A. $30,000 increase
B. $6,000 decrease
C. $4,000 decrease
D. $4,000 increase
69) Incremental analysis would not be appropriate for
A. Analysis of manufacturing variances
B. elimination of an unprofitable segment.
C. an allocation of limited resource decision.
D. a make or buy decision.
70) Which of the following does not appear as a separate section on the cash budget?
A. Financing
B. Capital expenditures
C. Cash disbursements
D. Cash receipts
Total 500 Questions from 5 set of actual exams (5 sets x 100 questions) with double checked answers
final exam str 581
str 581 final exam answers
str 581 final exam
str 581 final
100 % A+ Correct answers !! Double Checked
str 581 final exam answers
str 581 final exam
str 581 final
