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ABA CTFA Practice Test - Questions Answers, Page 8

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Question 71

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What are the earnings per share (EPS) for a company that earned $100,000 last year in after-tax profits, has 200,000 common shares outstanding and $1.2 million in retained earning at the year end?

$100,000
$100,000
$6.00
$6.00
$0.50
$0.50
$6.50
$6.50
Suggested answer: C
asked 16/09/2024
Danilo Nogueira
37 questions

Question 72

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A single, overall cost of capital is often used to evaluate projects because:

It avoids the problem of computing the required rate of return for each investment proposal
It avoids the problem of computing the required rate of return for each investment proposal
It is the only way to measure a firm's required return
It is the only way to measure a firm's required return
It acknowledges that most new investment projects have about the same degree of risk
It acknowledges that most new investment projects have about the same degree of risk
It acknowledges that most new investment projects offer about the same expected return
It acknowledges that most new investment projects offer about the same expected return
Suggested answer: A
asked 16/09/2024
ahmed bin shehab
45 questions

Question 73

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The cost of equity capital is all of the following Except:

The minimum rate that a firm should earn on the equity-financed part of an investment
The minimum rate that a firm should earn on the equity-financed part of an investment
A return on the equity-financed portion of an investment that, at worst, leaves the market price of the stock unchanged
A return on the equity-financed portion of an investment that, at worst, leaves the market price of the stock unchanged
By far the most difficult component cost to estimate
By far the most difficult component cost to estimate
Generally lower than the before-tax cost of debt
Generally lower than the before-tax cost of debt
Suggested answer: D
asked 16/09/2024
OLUWAGBENRO AFUWAPE
39 questions

Question 74

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If the following are balance sheet changes:

$5,005 decrease in accounts receivable

$7,000 decrease in cash

$12,012 decrease in notes payable

$10,001 increase in accounts payablea 'use' of funds would be the:

$7,000 decrease in cash
$7,000 decrease in cash
$5,005 decrease in accounts receivable
$5,005 decrease in accounts receivable
$10,001 increase in accounts payable
$10,001 increase in accounts payable
$12,012 decrease in notes payable
$12,012 decrease in notes payable
Suggested answer: D
asked 16/09/2024
Mohammed Meddah
39 questions

Question 75

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The concept that dollar today is worth more than a dollar received in future. It is:

Time value of money
Time value of money
Compounding
Compounding
Timeline
Timeline
Future value
Future value
Suggested answer: A
asked 16/09/2024
Robert Calderon
36 questions

Question 76

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Rule 72 is:

A useful formula for estimating how long it will take to double a sum at a given interest rate
A useful formula for estimating how long it will take to double a sum at a given interest rate
A useful formula for estimating how long it will take to triple a sum at a given interest rate
A useful formula for estimating how long it will take to triple a sum at a given interest rate
A useful formula for estimating how long it will take to graphically represent the time value of money
A useful formula for estimating how long it will take to graphically represent the time value of money
A useful formula for estimating how long it will take to make the future value of deposited money
A useful formula for estimating how long it will take to make the future value of deposited money
Suggested answer: A
asked 16/09/2024
Tom Starren
43 questions

Question 77

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On an accounting statement of cash flows an 'increase(decrease) in cash and cash equivalents' appears as:

A cash flow from operating activities
A cash flow from operating activities
A cash flow from investing activities
A cash flow from investing activities
A cash flow from financing activities
A cash flow from financing activities
None of the above
None of the above
Suggested answer: D
asked 16/09/2024
Miguel Monteiro
38 questions

Question 78

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Uses of funds include a (an):

Decrease in cash
Decrease in cash
Increase in any liability
Increase in any liability
Increase in fixed assets
Increase in fixed assets
Tax refund
Tax refund
Suggested answer: A
asked 16/09/2024
Sandeep Ramakrishnan
49 questions

Question 79

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A tax structure in which the larger the amount of taxable income, the higher the rate at which it is taxed is:

Marginal tax rate
Marginal tax rate
Progressive tax structure
Progressive tax structure
Tax bracket
Tax bracket
Immovable tax structure
Immovable tax structure
Suggested answer: B
asked 16/09/2024
vladimir nezgoda
34 questions

Question 80

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Average tax rate:

Is the rate at which each dollar of taxable income is taxed on average; calculated by dividing the tax liability by taxable income
Is the rate at which each dollar of taxable income is taxed on average; calculated by dividing the tax liability by taxable income
Is the rate at which each dollar of taxable income is taxed annually; calculated by dividing the tax liability by taxable income.
Is the rate at which each dollar of taxable income is taxed annually; calculated by dividing the tax liability by taxable income.
Is the rate at which each dollar of taxable income is taxed on average; calculated by dividing the tax liability by non-taxable income
Is the rate at which each dollar of taxable income is taxed on average; calculated by dividing the tax liability by non-taxable income
Is the rate at which each dollar of taxable income is taxed on average; calculated by dividing the tax liability by expenses
Is the rate at which each dollar of taxable income is taxed on average; calculated by dividing the tax liability by expenses
Suggested answer: A
asked 16/09/2024
Tiro malope
40 questions
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