Q&A Hero

Q: Find the NOPAT given the following information: sales = $520,000; earnings before interest = $100,000; interest = $20,000; and the tax rate = 30%. a. $70,000 b. $56,000 c. $30,000 d. $24,000

Q: Multiple-Choice Questions for Appendix AHow is a firm's net operating profit after taxes (NOPAT) calculated?a. NOPAT = Net Profit EBITb. NOPAT = EBIT (1 Tax Rate)c. NOPAT = EBT Interest Paidd. NOPAT = EBIT Tax Rate

Q: Find the survival revenues (SR), also known as the EBDAT breakeven, based on the following information: cash fixed costs = $60,000; variable costs = $70,000; and sales = $100,000.a. $100,000b. $116,667c. $200,000d. $300,000

Q: Which of the following is a source of cash? a. an increase in accounts receivable b. the acquisition of land c. an increase in the amount owed on a note payable d. the repurchase of outstanding shares of stock

Q: The practice of recording economic activity when it is recognized rather than waiting until it is realized is called: a. GAAP accounting b. accrual accounting c. forward-looking accounting d. management accounting

Q: Which of the following is a use of cash? a. a decrease in inventory b. an increase in accrued liabilities c. the sale of an asset for a gain d. a decrease in the amount owed on a bond

Q: Multiple-Choice Questions for Appendix AWhich of the following shows the calculation for economic value added (EVA)?a. EVA = NOPAT + After-Tax Dollar Cost of Financial Capital Usedb. EVA = ROE Percentage Cost of Financial Capitalc. EVA = NOPAT After-Tax Dollar Cost of Financial Capital Usedd. EVA = ROE + Percentage Cost of Financial Capital

Q: A firm with constant variable costs has a survival revenues breakeven of $375,000. This year, it had $250,000 in sales, $100,000 of which was a fixed cost. What are the firm's cash fixed costs?a. $150,000b. $225,000c. $625,000d. $937,500

Q: Your venture has total assets of $690, net fixed assets of $500, long term debt of $80, and stockholders' equity of $400. What is the amount of your venture's current liabilities? a. $120 b. $100 c. $210 d. $290

Q: Retained earnings is: a. a corporate asset b. part of owners' equity c. a corporate asset minus current liabilities d. long-term debts plus current assets

Q: Multiple-Choice Questions for Appendix ALast year, a firm had sales of $200,000. Its cost of goods sold was $75,000; administrative expenses were $25,000; marketing expenses were $25,000; depreciation expense was $10,000; and interest expense was $15,000. If the tax rate is 30%, what was the firm's NOPAT last year?a. $19,500b. $35,000c. $45,500d. $52,500

Q: Cash includes all of the following except:a. coinsb. currencyc. checking accountsd. certificates of deposit

Q: In breakeven analysis, solving for when EBITDA is equal to zero gives breakeven in terms of: a. economic revenues b. variable costs c. survival revenues d. fixed costs

Q: Which of the following is not a characteristic of inventories? a. raw materials b. finished products c. goods sold but not yet shipped d. work-in-process

Q: The balance sheet equation states that total assets equals: a. total liabilities plus depreciation b. total liabilities plus owners' equity c. owners' equity plus net income d. owners' equity plus current liabilities

Q: Net cash burn occurs when the sum of which of the following items is negative? a. cash flows from operations and financing b. cash flows from investing and financing c. cash flows from operations and investing d. cash flows from net income and depreciation

Q: Multiple-Choice Questions for Appendix AWhich of the following is the correct formula for computing NOPAT?a. NOPAT = Revenues (1 + Tax Rate)b. NOPAT = Revenues (1 Tax Rate)c. NOPAT = EBITDA (1 Tax Rate)d. NOPAT = EBIT (1 Tax Rate)

Q: A financial statement that shows how cash, as reflected in accrual accounting, flows into and out of a company during a specific period of operation is called the:a. income statementb. balance sheetc. statement of retained earningsd. statement of cash flows

Q: Which of the following is not considered to be an internal operating schedule? a. income statement b. cost of production schedule c. cost of goods sold schedule d. inventories schedule

Q: Expenses or costs that vary directly with revenues are said to be: a. fixed expenses b. semifixed expenses c. semivariable expenses d. variable expenses

Q: Multiple-Choice Questions for Appendix AFind the NOPAT breakeven revenues (NR) given the following information: total operating fixed costs = $75,000; variable costs = $150,000; and sales = $200,000.a. $100,000b. $240,000c. $300,000d. $400,000

Q: Find the contribution profit margin based on the following information: cash fixed costs = $60,000; variable costs = $70,000; and sales = $100,000.a. 70%b. 60%c. 30%d. 40%

Q: Multiple-Choice Questions for Appendix ADetermine the total operating fixed costs (TOFC) based on the following: administrative expenses = $200,000; marketing expenses = $180,000; depreciation expenses = $100,000; and interest expenses = $20,000.a. $380,000b. $400,000c. $480,000d. $500,000

Q: A financial statement that reports the revenues generated and expenses incurred over an accounting period is called the:a. income statementb. balance sheetc. statement of retained earningsd. statement of cash flows

Q: A lease that provides maintenance in addition to financing and is also usually cancelable is called a(n): a. capital lease b. operating lease c. asset lease d. equity lease

Q: What is the survival revenues breakeven based on the following information: administrative expenses = $200,000; marketing expenses = $180,000; depreciation expenses = $100,000; interest expenses = $20,000; and a variable cost revenue ratio = 0.50? a. $600,000 b. $800,000 c. $1,000,000 d. $1,200,000

Q: A financial statement that provides a snapshot of a business's financial position as of a specific date is called the: a. income statement b. balance sheet c. statement of retained earnings d. statement of cash flows

Q: Which of the following is the equation for EBDAT? a. EBDAT = Revenues Variable Costs Cash Fixed Costs b. EBDAT = Revenues + Variable Costs + Cash Fixed Costs c. EBDAT = Revenues Variable Costs Total Fixed Costs d. EBDAT = Revenues + Variable Costs Cash Fixed Costs

Q: 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. a. $380,000 b. $400,000 c. $480,000 d. $500,000

Q: In its first year, Joe's Startup Company had revenues of $125,000 and cost of goods sold of $81,250, which was the only variable cost. Depreciation was $20,000. Cash fixed costs were $100,000, consisting of $5,000 in financing costs, $50,000 in administrative expenses, and $45,000 in marketing expenses. What is the survival breakeven revenues? a. $342,857 b. $285,714 c. $271,429 d. $184,615

Q: Which of the following is the computation for gross earnings? a. Gross Earnings = Revenue After-Tax Cost of Financial Capital Used b. Gross Earnings = Net Income Sales c. Gross Earnings = (Net Sales Cost of Production) Tax Rate d. Gross Earnings = Net Sales Cost of Production

Q: Which of the following is not a characteristic of marketable securities? a. short term b. illiquid c. high quality d. interest bearing

Q: Internal operating schedules include all of the following except: a. cost of production schedules b. inventories schedules c. balance sheets d. cost of goods sold schedules

Q: Use the following information to compute the survival revenues breakeven: cash fixed costs = $400,000 and a variable cost revenue ratio = 0.65. a. $460,500 b. $615,385 c. $1,142,857 d. $2,000,334

Q: During which of the following venture life cycle stages is the entrepreneur concerned with choosing the initial organizational form? a. development stage b. startup stage c. survival stage d. rapid-growth stage

Q: Patents that cover most inventions pertaining to new products, services, and processes are referred to as: a. design patents b. plant patents c. utility patents d. mechanical patents

Q: In a general partnership, legal action that treats all partners equally as a group is called: a. general liability b. joint liability c. limited liability d. accrued liability

Q: Based on 2018 tax schedules, the highest marginal tax rate on personal taxable income is: a. 25.0% b. 28.0% c. 33.0% d. 37.0%

Q: Which of the following numbers of shareholders is allowed in a subchapter S (or S) corporation business form? a. 100 b. 125 c. 130 d. 500

Q: During the development stage, seed financing chiefly comprises: a. funds from business angels and venture capitalists b. the entrepreneur's personal assets and funds from family and friends c. venture capitalists and the entrepreneur's personal assets d. business angels and funds from family and friends

Q: Which of the following are intellectual property rights granted for inventions that are useful, novel, and nonobvious? a. patents b. trademarks c. copyrights d. trade secrets

Q: The LeahySmith America Invents Act of 2011 was the first major change since 1952 involving how: a. patent trolls can operate b. the U.S. patent system operates c. patents differ from trademarks d. trade secrets can be converted to patents

Q: The rules and procedures established to govern the corporation are called the: a. corporate charter b. articles of incorporation c. corporate bylaws d. confidentiality disclosure agreements

Q: Following is a partial personal taxable income schedule for a single filer:Over— But NotOver— Difference MarginalTax Rate $ 0 $ 9,525 $ 9,525 0.10 9,525 38,700 29,175 0.12 38,70082,500 43,800 0.22The average tax rate for a single filer with taxable income of $82,500 would be:a. 12.0%b. 17.1%c. 18.6%d. 22.0%

Q: Which form of business organization typically offers the easiest transfer of ownership? a. proprietorship b. general partnership c. corporation d. subchapter S corporation

Q: Which of the following forms of protecting intellectual property currently has a protection limit of 20 years? a. copyrights b. patents c. trade secrets d. trademarks

Q: Certification marks are typically used to: a. indicate membership in a trade group b. indicate a certain brand of service c. indicate quality d. associate products to a specific brand

Q: Business angels typically invest in: a. early-stage ventures b. rapid-growth stage ventures c. maturity-stage ventures d. going-public ventures

Q: In which form of business organization are the owners not offered the protection of limited liability? a. proprietorship b. limited partnership c. corporation d. subchapter S corporation

Q: Which of the following is not a likely source of first-round financing during the survival stage of a venture's life cycle? a. venture capitalists b. commercial banks c. family and friends d. suppliers and customers

Q: Based on 2018 tax schedules, the highest tax rate on corporate taxable income is: a. 15.0% b. 21.0% c. 35.0% d. 38.0%

Q: In which form of business organization is the taxation effects characterized by the income flowing to shareholders taxed at personal tax rates? a. proprietorship b. limited partnership c. corporation d. subchapter S corporation

Q: Which of the following is not a type of mark? a. trademark b. service mark c. collective mark d. design mark

Q: Which form of business organization is characterized by having the shortest startup time and lowest legal costs? a. proprietorship b. limited partnership c. corporation d. limited liability company (LLC)

Q: Intellectual property can be protected by all of the following except: a. patents b. trademarks c. legal disclaimers d. copyrights

Q: Patents are intellectual property rights granted for inventions that are: a. not useful, novel, and nonobvious b. not useful, not novel, and obvious c. useful, novel, and nonobvious d. useful, not novel, and obvious

Q: The total dollar amount of federal income taxes paid by a corporation with taxable income of $75,000 under the 2018 tax law would be: a. $7,500 b. $10,500 c. $15,750 d. $18,750

Q: Which of the following are not sources of seed and startup financing? a. family and friends b. the entrepreneur's physical and financial assets c. business angels and venture capitalists d. stock and bond markets

Q: Which of the following is not a kind of patent? a. utility b. design c. mark d. business method

Q: Based on 2018 tax schedules, the first dollar of corporate income is taxed at which of the following tax rates? a. 10.0% b. 15.0% c. 21.0% d. 25.0%

Q: Which of the following forms of protecting intellectual property had its protection limit increased from 17 to 20 years? a. copyrights b. trademarks c. patents d. trade secrets

Q: Which of the following are intellectual property rights to writings in printed and electronically stored forms? a. patents b. trademarks c. legal disclaimers d. copyrights

Q: Based on 2018 tax schedules, the first dollar of personal taxable income is taxed at which of the following marginal tax rates? a. 5.0% b. 10.0% c. 15.0% d. 20.0%

Q: Which of the following are intellectual property rights in the form of inventions and information, such as formulas, processes, and customer lists, that are not generally known to others and that convey economic advantages to the holders? a. patents b. trademarks c. copyrights d. trade secrets

Q: Which of the following are intellectual property rights that allow firms to differentiate their products and services through the use of unique marks which allow consumers to easily identify the source and quality of the products and services? a. patents b. trademarks c. copyrights d. trade secrets

Q: Wealthy individuals who invest in early-stage ventures in exchange for the excitement of launching a business and a share in any financial rewards are known as: a. creditors b. white knights c. business angels d. stakeholders

Q: Which of the following is not a right of general partners? a. participation in profits b. no participation in management c. veto right on new partners d. access to partnership books

Q: Which form of business organization is characterized as having unlimited life? a. proprietorship b. limited partnership c. limited liability company (LLC) d. subchapter S corporation

Q: If you are an inventor with a patent, the: a. U.S. Patent Office will enforce your rights b. U.S. government will enforce your rights c. burden of enforcing your patent is yours d. LeahySmith America Invents Act provides patent protection

Q: Intellectual property rights to writings in printed and electronically stored forms are protected by: a. patents b. copyrights c. trade secrets d. trademarks

Q: The term that refers only to words, symbols, shapes, and similar items associated with products is: a. trademarks b. service marks c. collective marks d. certification marks

Q: Which of the following business organizational forms provides the owners with limited investor liability and passes its income before taxes through to the owners? a. partnerships and S corporations b. S corporations and C corporations c. C corporations and limited liability companies (LLCs) d. S corporations and limited liability companies (LLCs)

Q: A business method patent is one kind of patent. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

Q: Patent trolls are firms authorized by the U.S. Congress to help reduce the number of patent-related lawsuits. a. True b. False

Q: The 2018 flat corporate tax rate was higher than the lowest personal marginal income tax rate. a. True b. False

Q: A copyright must be registered with the U.S. Copyright Office in order for a work to be protected. a. True b. False

Q: Copyrights are intellectual property rights to writings in printed and electronically stored forms. a. True b. False

Q: Professional corporations (PCs) and service corporations (SCs) are corporate structures that states provide for professionals such as physicians, dentists, lawyers, and accountants. a. True b. False

Q: Chapter 3 begins the focus on the startup and survival stages of a venture's life cycle. a. True b. False

Q: The LeahySmith America Invents Act of 2011 was passed, in part, to alleviate the backlog of patent-related lawsuits. a. True b. False