Which of the following assets’ book values would, in general, most accurately re
ID: 3182291 • Letter: W
Question
Which of the following assets’ book values would, in general, most accurately represent the assets’ true market value?
a. specialized inventory that can only be used for specific projects
b. real estate assets of the firm
c. equipment assets of the firm used in production activities
d. inventory that is widely used in many common manufacturing activities
2. Which of the following is more relevant for financial decision-making?
Market values
Book values
Sunk costs
They are all equally relevant
3. A speedup in a firm’s __________ should __________ a firm's financing needs; whereas, a slowdown in a firm’s __________ should __________ financing needs for a firm. (Hint: Systematically go through each alternative a-e individually (sequentially) & decide if it is correct, then select the correct response. Also, note that everything is from the firm’s perspective; thus collections are received by the firm and payments are paid by the firm.)
a. collections; decrease; payments; increase
b. payments; increase; collections; decrease
c. collections; increase; payments; increase
d. payments; increase; collections; increase
e. collections; increase; collections; decrease
4. The extended Du Pont equation, a.k.a. the 3 component decomposition of ROE equation, (i.e. ROE = (profit margin)x(total asset turnover)x(equity multiplier)) is used to
a. compute the firm’s ROE, as the equation states.
b. determine if the firm is liquid
c. compute the firm’s ROA, as the equation states.
d. decompose the firm’s ROE into sub-components, for a better understanding of the firm’s financial health.
Explanation / Answer
Which of the following assets’ book values would, in general, most accurately represent the assets’ true market value?
Answer : equipment assets of the firm used in production activities
2. Which of the following is more relevant for financial decision-making?
Answer : Market values
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.