KEY - Final Examination A - Page 6 of 17 Finance (FINE Which of the following si
ID: 2620342 • Letter: K
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KEY - Final Examination A - Page 6 of 17 Finance (FINE Which of the following situations must exist for a market to exhibit a strong form of efficiency? 24. The cost of capital is the same for each investor in the market The risk premium is the same for each investor in the market A large number of investors are immediately motivated by new information to trade shares establishing the best estimate of the worth of the stocks A single investor is motivated by new information to trade shares resulting in the best estimate of the worth of the stocks A) B) C) D) 25. Which of the following is an internal source of long-term capital? A) Retained earnings B) Preferred shares C) Common shares D) Bonds 26. Accumulated amortization is grouped under A) B) C) D) Capital assets as a contra account Shareholders equity and serves to reduce its value Long-term liabilities as a penitentiary Expenses on the income statement 27. What is the Economic Order Quantity (EOQ)? A) The amount that should be ordered to minimize the cost of holding the inventory B) The period of time between orders in days, months and/or quarters, to reduce the C) The total inventory cost considering the value of the purchase, order costs, and the cost of ordering inventory holding and ordering costs warehousing costs and labour costs The cost of an individual order considering the value of the purchase, order costs, warehousing costs and labour costs D) 28. What is the risk in using a bank overdraft as a source of financing? A) B) C) D) It will negatively impact the credit rating of the company It may have to be paid in full with little prior notice Interest costs cannot be deducted from income taxes The company's indebtedness will grow beyond its ability to handle it . A mission statement reflects a company's A) Short-term objectives B) Promises to customers C) Operational tactics D) Ultimate purposeExplanation / Answer
Answer 24) Option C :
Answer 25) Option A : Retained Earning
Answer 26) Option A : Capital Asset as contra account
Answer 27) Option A : the amount that should be ordered to minimize the cost of holding the inventory and the cost of ordering
Answer 28) Option B: it may have to be paid in full with little prior notice.
Answer 29) Option A : short term objective
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