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Exam 4: Measuring Financial Performance

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Question 31

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GAAP stands for "General American Accounting Principles."

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Question 32

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Production assets (e.g. ,inventories and equipment to produce products and give credit to customers)usually occurs during the development stage in a new venture's life cycle.

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Question 33

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Use the following information to determine the cash fixed costs: Administrative expenses = $200,000;Marketing expenses = $180,000;Depreciation expenses = $100,000;and Interest expenses = $20,000.

Net cash burn occurs when the sum of cash flows from operations and investing is positive.

Which of the following is not a characteristic of marketable securities?

Amounts owed to another for purchase made on credit which come due in less than one year are known as receivables.

Which of the following is not a category on the statement of cash flows?

Financial statement that reports the revenues generated and expenses incurred over an accounting period is called the

Acme Pest Control has sales of $13,500,cost of goods sold of $4,000,selling expenses of $3,500,depreciation of $2,000,interest expense of $2,000,and a tax rate of 34%. -What is Acme's net income?

Acme Pest Control has sales of $13,500,cost of goods sold of $4,000,selling expenses of $3,500,depreciation of $2,000,interest expense of $2,000,and a tax rate of 34%. -What is Acme's taxable income and tax expense?

Which of the following is not depreciated?

"Contribution profit margin" is the portion of the sale of a product that contributes to covering the cash fixed costs.

During the development stage in a new venture's life cycle,the income statement typically shows no sales but expenses such as rent,utilities,and a subsistence salary for the entrepreneur.

"Economic value added" (EVA)measures a firm's market value added over a specified time period.

The reduction in value of a fixed asset over its expected life intended to reflect the usage or wearing out of the asset is called accumulated depreciation.

Net income,or profit,is the bottom line measure of what's left from the firm's net sales after operating expenses,financing costs,and taxes have been deducted.

During the development stage in a new venture's life cycle,the balance sheet reflects the acquisition of initial assets and the obtaining of seed financing.

"Net cash burn" occurs when the sum of which of the following items is negative?

Seed financing (e.g. ,financing from the entrepreneur's assets,family,and friends)usually occurs during the development stage in a new venture's life cycle.

Which of the following is a use of cash?