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ABA CTFA Practice Test - Questions Answers, Page 8

Question list

List of questions

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?

Question 72

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

Question 73

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

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

Question 75

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

Question 76

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Rule 72 is:

Question 77

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

Question 78

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Uses of funds include a (an):

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:

Question 80

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Average tax rate:

Question 71

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

$6.00

$0.50

$6.50

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Question 72

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 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 offer about the same expected return

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Question 73

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

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

Generally lower than the before-tax cost of debt

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Question 74

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

$5,005 decrease in accounts receivable

$10,001 increase in accounts payable

$12,012 decrease in notes payable

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Question 75

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

Time value of money

Compounding

Timeline

Future value

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Question 76

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 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 make the future value of deposited money

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Question 77

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 investing activities

A cash flow from financing activities

None of the above

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Question 78

Uses of funds include a (an):

Decrease in cash

Increase in any liability

Increase in fixed assets

Tax refund

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Question 79

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

Progressive tax structure

Tax bracket

Immovable tax structure

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Question 80

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 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 expenses

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ABA CTFA Practice Test - Questions Answers, Page 8

Question list

List of questions

Question 71

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Question 72

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Question 73

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Question 74

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Question 75

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Question 76

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Question 77

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Question 78

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Question 79

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Question 80

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