A company that is breaking even is making a profit. ( a) True ( b) False

Q: Explain with an example of how a healthy company might not have a spectacular ROE because there is…

A: Return in Equity or R.O.E. Return on equity refers to as the percentage of return, a company is…

Q: When the insiders can earn abnormally high profits based on private information. This is again st of…

A: Effecient market hypothesis theory which tells the digree to which stock prices reflects all…

Q: Is it because: a. The capital gain will be different because the dividend did not change. or…

A: Capital gain can be calculated s follows: Capital gain=(Sale price - Cost price)Cost price* 100

Q: Why do loss-making companies still pay a dividend? A) The tax benefits exceed the loss incurred in…

A: Dividend policy represents the decision-making of the management regarding the declaration or…

Q: The current ratio and the quick or acid-test ratio may be too high for the overall good of the…

A: The current ratio and the quick ratio are a measure of the liquidity of the company. The current…

Q: A firm cannot maintain a return on common equity less than the required rate of return and stay in…

A: Required rate of return is the minimum return rate which is accepted by the shareholders for the…

Q: Since NFPOs do not have as an objective making a profit for their own- ers, why should they be…

A: Not-for-profit organizations, also known as non-profit organizations, are entities that are…

Q: A company cannot be increasing its market share if its net sales are declining

A: The objective of the question is to understand whether a company can increase its market share even…

Q: It is possible for a company to "maximize profits" and also not be profitable. * True False.

A: Allocate resources to develop new products or improve existing ones. This investment might not…

Q: Which one of the following is a soft benefit?    Depreciation tax shield   Reduction in the number…

A: Soft benefit:- It is the benefits that can be measured in terms of money. It can include aspects…

Q: Risks of improper revenue recognition are generally higher in developing companies than more nature…

A: Revenue recognition - Revenue recognition is the process of recognizing revenue earned by the…

Q: Using profit as the sole guide for corporate action can lead to short term profits but: B a.)…

A: Business may earn initially from customer by charging higher price but in long run the customer will…

Q: If you test the market to see whether insiders can make extra profit, it is a test of the maker…

A: If markets are efficient and strong than even insiders are not able to make the profits in market.…

Q: Factors that influence business risk include except   Group of answer choices   A)liability…

A: Liability uncertainty is one of the factors that can cause business risk. It refers to the potential…

Q: FASB allows debt to be shown at its fair market value. Consequently, if a company in financial…

A: Financial Accounting Standards Board (FASB) The FASB, located in Norwalk, Connecticut, is an…

Q: Is it possible for a company to show positive net income and still go bankrupt?

A: Bankruptcy is a process in which corporations or individuals who are unable to pay their debts and…

Q: A company's market value is generally less than its book value. True of Falses ?

A: Fixed Assets are the Non-current portion of the assets that disclosed in the assets section of the…

Q: 6. Business risk is that type of risk in which: a) The company is unable to meet its financial…

A: Types of risk consist of financial risk, operational risk and business risk.

Q: A company could use other gains and losses to Omanipulate its stock price. reduce reported sales,…

A: "Other gains and losses" in financial reporting refer to non-operating items that can impact a…

Q: Explain two possible risks to a company that makes losses regularly?

A: There are many possible risks of bussiness losses.

Q: one of the following is true regarding the business and financial risk: Select one: a. the business…

A: Business risk refers to that type of risk which involves the decline in profitability and stability…

Q: Firm's that choose to hold more current assets are in general is more ILLIQUID that firms that do…

A: Current assets are resources of value that the company expects to utilize or transform in 1 year to…

Q: Answer true or false and explanation to why. Restructuring the liabilities might positively…

A: Debt and liability restructuring is the process of settling all owing and unpaid liabilities by…

Q: A company expected to go bankrupt in the near future is considered to be operating under the…

A: Three fundamental assumptions of accounting are: 1.Going concern assumption 2. Accrual 3.…

Q: Which of the following is an example of “cookie jar” accounting?  a) A company creates cash…

A: Cookie jar accounting is a term that have been defined as below.

Q: Company insiders who can earn excess profits on company stock based on their private knowledge…

A: Stock price depends on the information. As people get information, they start pricing the stock…

Q: Explain whether the following statement is true or false: Only weak companies issuedebentures.

A: A long-term liability that is issued by a company with a fixed interest rate to raise the fund for…

Q: Which of the following statements is/are INCORRECT? O 1) Takeover threats tends to affect managerial…

A: Corporations have double taxation problems: The given statement is true as the income id once…

Q: Explain the Answer

A: Yes, it is possible for a business to have both negative accounting profit and negative economic…

Q: Accounting Question

A: Journal entry: Journal is a book of prime entry or a book of original entry in which transactions…

Q: In terms of risk, labor union disputes, entry of a new competitor and embe management are all…

A: In the market there are two types of risks one are related to overall market that can not controlled…

Q: While being in different industries, two companies have the same expected earnings per share and the…

A: Business risk is the exposure to risk a company faces from the internal and external factors which…

Q: When the insiders can eam abnormally high profits based on private information. This is against of…

A: Market efficiency is the theory that reflects the impact of information on the prices of stock…

Q: Potential dilutors are anti-dilutive if they increase basic earnings per share and they should not…

A: Dilutive securities include stock options, stock warrants, convertible preferred stock, and…

Q: Which of the following statement is true? Select one: O A. One drawback of the P/E multiples is that…

A: The price to earning multiple ratio is a relative valuation approach for valuing with a particular…

Q: don´t undertand why Office Depot has the greatest possibility if the Debt ratio is higher which…

A: A liability is a legal obligation to pay other entities as a result of past transactions or other…

Q: In general, if an action increases a firm's value by providing benefits with a value greater than…

A: The value of the firm showing the current value of the firm in the market it comprises common…

Q: When you are purchasing a company stock, you are purchasing part of the company.

A: Companies issue stocks or shares for raising money from those investors who want to invest their…

Q: What is cost of financial distress to the firm without going bankrupt?Give two examples.

A: The financial distress costs are all such cost incurred by company due to the probability that it…

Q: rong form efficient eak form efficient and S

A: Step 1 Strong form performance is a very strong version of the efficient market hypothesis (EMH)…

Q: How important is profit? How can a company survive when it isn't making a profit? How can a company…

A: profit is the most important thing for business order to exist for a longer period of time and have…

Q: Restructuring the liabilities might positively influence the ROE, but will negatively influence the…

A: ROE helps in the determination of earning over the capital invested in the company.The following…

Q: The accounting assumption or principle of __________________ is being violated if a company that is…

A: The Full Disclosure Principle states that all relevant and necessary information must be included…

Q: If one of your firm's customers is "stretching" its accounts payable, this may be a nuisance but it…

A: If one of your firm's customers is "stretching" its accounts payable, this may be a nuisance but it…

Q: The going concern assumption is inappropriate when: Select one: liquidation appears likely. market…

A: As per going concern assumption, a business will remain active for foreseeable future. It means that…