BEC REVIEW 2

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Joens1313
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BEC REVIEW 2
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2015-10-24 14:37:06
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BEC REVIEW 2
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  1. A --------------------- is the last budget to be prepared in the budgeting process because the other steps must be completed before the effects of each part on ------------- can be estimated.
    A cash budget is the last budget to be prepared in the budgeting process because the other steps must be completed before the effects of each part on cash can be estimated.
  2. A cash budget is the last budget to be prepared in the budgeting process because ------------------------------------------------------------------------------------------------------------------------.
    A cash budget is the last budget to be prepared in the budgeting process because the other steps must be completed before the effects of each part on cash can be estimated.
  3. The steps to prepare a master budget are:

    -----------------------,

    determine the desired level of finished goods inventory,

    prepare a purchases or production budget,

    estimate selling, administrative, and other general expenses,

    organize the preceding information into an income statement, and

    prepare a cash forecast.
    The steps to prepare a master budget are:

    develop a sales forecast,

    determine the desired level of finished goods inventory,

    prepare a purchases or production budget,

    estimate selling, administrative, and other general

    expenses,organize the preceding information into an income statement, and

    prepare a cash forecast.
  4. The steps to prepare a master budget are:

    develop a sales forecast,

    --------------------------,

    prepare a purchases or production budget,

    estimate selling, administrative, and other general expenses,

    organize the preceding information into an income statement, and

    prepare a cash forecast.
    The steps to prepare a master budget are:

    develop a sales forecast,

    determine the desired level of finished goods inventory,

    prepare a purchases or production budget,

    estimate selling, administrative, and other general expenses,

    organize the preceding information into an income statement, and

    prepare a cash forecast.
  5. The steps to prepare a master budget are:

    develop a sales forecast,

    determine the desired level of finished goods inventory,

    -------------------------,

    estimate selling, administrative, and other general expenses,

    organize the preceding information into an income statement, and

    prepare a cash forecast.
    The steps to prepare a master budget are:

    develop a sales forecast,

    determine the desired level of finished goods inventory,

    prepare a purchases or production budget,

    estimate selling, administrative, and other general expenses,

    organize the preceding information into an income statement, and

    prepare a cash forecast.
  6. The steps to prepare a master budget are:

    develop a sales forecast,

    determine the desired level of finished goods inventory,

    prepare a purchases or production budget,

    ----------------------------,

    organize the preceding information into an income statement, and

    prepare a cash forecast.
    The steps to prepare a master budget are:

    develop a sales forecast,

    determine the desired level of finished goods inventory,

    prepare a purchases or production budget,

    estimate selling, administrative, and other general expenses,

    organize the preceding information into an income statement, and

    prepare a cash forecast.
  7. The steps to prepare a master budget are:

    develop a sales forecast,

    determine the desired level of finished goods inventory,

    prepare a purchases or production budget,

    estimate selling, administrative, and other general expenses,

    ------------------------------, and

    prepare a cash forecast.
    The steps to prepare a master budget are:

    develop a sales forecast,

    determine the desired level of finished goods inventory,

    prepare a purchases or production budget,

    estimate selling, administrative, and other general expenses,

    organize the preceding information into an income statement, and

    prepare a cash forecast.
  8. The steps to prepare a master budget are:

    develop a sales forecast,

    determine the desired level of finished goods inventory,

    prepare a purchases or production budget,

    estimate selling, administrative, and other general expenses,

    organize the preceding information into an income statement, and

    ----------------------------.
    The steps to prepare a master budget are:

    develop a sales forecast,

    determine the desired level of finished goods inventory,

    prepare a purchases or production budget,

    estimate selling, administrative, and other general expenses,

    organize the preceding information into an income statement, and

    prepare a cash forecast.
  9. The steps to prepare a master budget are:

    -----------------------,

    -------------------------,

    -------------------------,

    --------------------------,

    --------------------------, and

    -------------------------.
    The steps to prepare a master budget are:

    develop a sales forecast,

    determine the desired level of finished goods inventory,

    prepare a purchases or production budget,

    estimate selling, administrative, and other general expenses,

    organize the preceding information into an income statement, and

    prepare a cash forecast.
  10. What is current ratio?
    The current ratio is a liquidity ratio that measures a firm's ability to discharge currently maturing obligations from existing current assets that are expected to be converted into cash within the maturing period of the claims.
  11. How is current ratio calculated?
    The computation is:

    Current assets ÷ Current liabilities
  12. What is current ratio a measure of?
     Current ratio is a measure of short-term solvency
  13. Which is more precise, the current ratio or the quick ratio? Why?
    The Quick ratio is more precise.

    The Current ratio is a measure of short-term solvency; however, it is less precise than the quick ratio because a sizable amount of total current assets may be tied up in inventory, which is less liquid.
  14. ------------------------------------- is the sum of the outcomes (payoff) of each event multiplied by the probability of each event occurring. It combines the likelihood of each outcome with the payoff of that outcome, and so is a way of prioritizing alternatives while considering risk.
    Expected value is the sum of the outcomes (payoff) of each event multiplied by the probability of each event occurring. It combines the likelihood of each outcome with the payoff of that outcome, and so is a way of prioritizing alternatives while considering risk.
  15. Expected value is the -------------------------------------------------------------------------------.
    Expected value is the sum of the outcomes (payoff) of each event multiplied by the probability of each event occurring.
  16. what does expected value combine?
    It combines the likelihood of each outcome with the payoff of that outcome, and so is a way of prioritizing alternatives while considering risk.
  17. A shift in the supply curve to the right indicates --------------------------------------------------------------.
    A shift in the supply curve to the right indicates that a larger quantity of the product is supplied at each price.
  18. Things that shift the supply curve are:

    technology,

    prices of resources,

    expectation of future prices,

    number of sellers,

    ---------------------------------------------.
    Things that shift the supply curve are

    technology,

    prices of resources,

    expectation of future prices,

    number of sellers,

    taxes and other government restriction or subsidies.
  19. Things that shift the supply curve are

    technology,

    prices of resources,

    expectation of future prices, 

    ------------------------

    taxes and other government restriction or subsidies.
    Things that shift the supply curve are technology,

    prices of resources,

    expectation of future prices,

    number of sellers,

    taxes and other government restriction or subsidies.
  20. Things that shift the supply curve are

    technology, 

    ---------------------------

    expectation of future prices,

    number of sellers,

    taxes and other government restriction or subsidies.
    Things that shift the supply curve are

    technology,

    prices of resources,

    expectation of future prices,

    number of sellers,

    taxes and other government restriction or subsidies.
  21. Things that shift the supply curve are

    -----------------,

    prices of resources,

    expectation of future prices,

    number of sellers,

    taxes and other government restriction or subsidies.
    Things that shift the supply curve are

    technology,

    prices of resources,

    expectation of future prices,

    number of sellers,

    taxes and other government restriction or subsidies.
  22. Things that shift the supply curve are

    ---------------------,

    -----------------------,

    -----------------------,

    ----------------------,

    -----------------------.
    Things that shift the supply curve are

    technology,

    prices of resources,

    expectation of future prices,

    number of sellers,

    taxes and other government restriction or subsidies.
  23. The capital structure of a firm includes bonds with a coupon rate of 12% and an effective interest rate of 14%. The corporate tax rate is 30%. What is the firm's net cost of debt?
    9.8%

    The interest cost of the bonds is 14%. Use the effective rate rather than the standard rate; it is adjusted for compounding the interest more than annually.

    The tax savings equals 30% of 14%, or 4.2% (.30 × .14).

    Subtracting the tax savings from the interest cost yields the true cost of the debt:

    14% - 4.2% = 9.8%

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