41.Allof thefollowingrepresentcashoutflowstothefirmexcept a.Taxes. b.Interestpayments. c.Dividends. d.Purchaseofplantandequipment. e.Depreciation. e ANSWER: Easy DIFFICULTY: Cashflows TOPICS: 42.Otherthingsheldconstant,ifafirmholdscashbalancesinexcessof theiroptimallevelinanon-interestbearing account,thiswilltendtolowerthe firm's a.Profitmargin. b.Totalassetturnover. c.Returnonequity. d.Allof theabove. e.Answersbandcabove. e ANSWER: Easy DIFFICULTY: Excessivecashbalances TOPICS: 43.Otherthingsheldconstant,whichofthefollowingwillnotaffectthecurrentratio,assumingan initialcurrentratio greaterthan1.0? a.Fixedassetsaresoldforcash. b.Long-termdebtis issuedto pay offcurrentliabilities. c.Accountsreceivablearecollected. d.Cashisusedtopayoffaccountspayable. e.Abankloanisobtained,andtheproceedsarecreditedtothefirm'scheckingaccount. c ANSWER: Easy DIFFICULTY: Currentratio TOPICS:
41.Allof thefollowingrepresentcashoutflowstothefirmexcept a.Taxes. b.Interestpayments. c.Dividends. d.Purchaseofplantandequipment. e.Depreciation. ANSWER: e DIFFICULTY: Easy TOPICS: Cashflows 42.Otherthingsheldconstant,ifafirmholdscashbalancesinexcessof theiroptimallevelinanon-interestbearing account,thiswilltendtolowerthe firm's a.Profitmargin. b.Totalassetturnover. c.Returnonequity. d.Allof theabove. e.Answersbandcabove. ANSWER: e DIFFICULTY: Easy TOPICS: Excessivecashbalances 43.Otherthingsheldconstant,whichofthefollowingwillnotaffectthecurrentratio,assumingan initialcurrentratio greaterthan1.0? a.Fixedassetsaresoldforcash. b.Long-termdebtis issuedto pay offcurrentliabilities. c.Accountsreceivablearecollected. d.Cashisusedtopayoffaccountspayable. e.Abankloanisobtained,andtheproceedsarecreditedtothefirm'scheckingaccount. ANSWER: c DIFFICULTY: Easy TOPICS: Currentratio
Test-Bank-CFIN-4-4th-Edition-Besley.docx