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Grading Summary

These are the automatically computed results of your exam. Grades for essay questions, and comments from your instructor, are in the "Details" section below. Question Type: Multiple Choice Grade Details - All Questions 1. Question : Student Answer: Date Taken: Time Spent: Points Received: 5/11/2013 2 h , 10 min , 34 secs 36 / 36 (100%)

# Of Questions: 6

# Correct: 6

Money markets are markets for ______. foreign stocks consumer automobile loans U.S. stocks short-term debt securities long-term bonds

Points Received: Comments:


-2007170245 0 MultipleChoice -2007170245

6 of 6

1 MultipleChoice

True 1

2.

Question :

Which of the following could explain why a business might choose to organize as a corporation rather than as a sole proprietorship or a partnership? A. Corporations generally face fewer regulations. B. Corporations generally face lower taxes. C. Corporations generally find it easier to raise capital. D. Corporations enjoy unlimited liability. E. Statements C and D are correct.

Student Answer:

Instructor Explanation:

The advantages of incorporation include unlimited life, easy transferability of ownership interest, limited liability, and ease of raising money in the capital markets. Regulations and double taxation

are disadvantages of corporations.


Points Received: Comments:
-2007170244 0 MultipleChoice -2007170244 2 MultipleChoice True 2

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3.

Question : Student Answer:

Which of the following statements is true? One of the benefits of incorporating your business is that you become entitiled to receive unlimited liability. Sole proprietorships are subject to more regulations than corporations. Sole proprietorships do not have to pay corporate tax. All of the above answers are correct. None of the above answers are correct.

Instructor Explanation:

Sole proprietorships pay personal income tax, not corporate tax. The other statements are false. Corporations are subject to limited liability, but are subject to more regulations than the other forms of business organizations.
6 of 6

Points Received: Comments:


-2007170243 0 MultipleChoice -2007170243

3 MultipleChoice

True 3

4.

Question :

While other things are held constant, which of the following actions would increase the amount of cash on a company's balance sheet? The company repurchases common stock. The company pays a dividend. The company issues new common stock. The company purchases a new piece of equipment. The company gives customers more time to pay their bills.

Student Answer:

Points Received: Comments:


-2007170242 0 MultipleChoice -2007170242

6 of 6

4 MultipleChoice

True 4

5.

Question :

Kramer Corporation recently announced that its net income was lower than last year. However, analysts estimate that the company's net cash flow increased. What factors could explain this discrepancy? A. The company's depreciation expense increased. B. The company's interest expense declined. C. The company had an increase in its noncash revenues. D. Answers A and B are correct. E. Answers B and C are correct.

Student Answer:

Points Received: Comments:


-2007170241 0 MultipleChoice -2007170241

6 of 6

5 MultipleChoice

True 5

6.

Question : Student Answer:

Which of the following statements is most correct? A. Actions that increase net income will always increase net cash flow. B. One way to increase EVA is to maintain the same operating income with less capital. C. One drawback of EVA as a performance measure is that it mistakenly assumes that equity capital is free. D. Answers A and B are correct. E. Answers A and C are correct.

Instructor Explanation:

EVA = EBIT(1-T) - (after-tax cost of capital) (total capital). Therefore, if less capital is used with the same operating income, EVA will be increased.

Points Received: Comments:


-2007170240 0 MultipleChoice -2007170240

6 of 6

6 MultipleChoice

True 6

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