QUESTION: 313

Refer to the exhibit.

Presented below are partial year-end financial statement data (000 omitted from dollar amounts) for companies A and B:
If company A has a quick ratio of 2:1, then it has an accounts receivable balance of:

$100
$200
$300
$500

Answer(s): A

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QUESTION: 314

Preferred stock is less risky for investors than is common stock because:

Common stock pays dividends as a stated percentage of face value.
Common stock has priority over preferred stock with regard to earnings and assets.
Preferred dividends are usually cumulative.
Preferred stock with no conversion feature has a higher dividend yield than does convertible preferred stock.

Answer(s): C

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QUESTION: 315

Which of the following borrowing options is an unsecured loan?

Second-mortgage financing from a bank.
An issue of commercial paper.
Pledged accounts receivable.
Asset-based financing.

Answer(s): B

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QUESTION: 316

In an analysis of alternative credit-management policies, which of the following components will cause the net present value of receivables on credit sales to increase, if everything else remains constant?

A tougher collections policy that reduces the bad debt loss ratio.
A higher cost per unit sold.
A longer average collection period.
An increase in the cost of capital.

Answer(s): A

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QUESTION: 313

QUESTION: 314

QUESTION: 315

QUESTION: 316