An asset which ____________ is defined as a liquid asset. A. is readily and easily converted to cash. B. cost less than its current value. C. declines in value each year. D. has a physical presence
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An asset which ____________ is defined as a liquid asset.
A. is readily and easily converted to cash.
B. cost less than its current value.
C. declines in value each year.
D. has a physical presence
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- 1. An asset that is not expected to be converted to cash or consumed within one year or the operating cycle is:The assets that can be easily converted into cash within a short period of time that is one year or less are known : a. Fixed asset b. Intangible assets c. Investments d. Current assetsWhat do current liabilities and current assets have in common?a) Current assets are claims against current liabilities.b) If current assets increase, then there will be a corresponding increase in currentliabilities.c) Current liabilities and current assets are converted into cash.d) Current liabilities and current assets are those items that will be satisfied andconverted into cash, respectively, in one year or one operating cycle, whichever islonger.
- The characteristics of current assets are (Choose the INCORRECT answer) a) They are converted to cash within a yearb) They consist of short and long term financial assets and intangible fixed assetsc) They are considered liquid assetsd) They are used in the daily operations of the firmThe Payback method takes the initial investment and divides it by the accelerated depreciation per year of the investment True False In the Statement of Cash Flows, depreciation is ignored because it is a non cash expense. True FalseQUESTION 1 Which of the following events will NOT increase the demand for assets? A. Decline in wealth B. Increase in the asset return relative to other assets C. Increase in asset liquidity D. Decrease in the asset riskiness relative to other assets
- b. Disregard the assumptions in Part a. What is the depreciable basis? What are the annual depreciation expenses? c. Calculate the annual sales revenues and costs (other than depreciation). Why is it important to include inflation when estimating cash flows? d. Calculate annual net operating profit after sales (NOPAT). Then calculate the operating cash flows.liquid asset can be converted quickly to cash with little sacrifice in its value. Which of the following asset classes is generally considered to be the least liquid? Accounts receivable Plant and equipment Inventories The most recent data from the annual balance sheets of Free Spirit Industries Corporation and LeBron Sports Equipment Corporation are as follows: Balance Sheet December 31st31st (Millions of dollars) LeBron Sports Equipment Corporation Free Spirit Industries Corporation LeBron Sports Equipment Corporation Free Spirit Industries Corporation Assets Liabilities Current assets Current liabilities Cash $3,157 $2,029 Accounts payable $0 $0 Accounts receivable 1,155 743 Accruals 696 0 Inventories 3,388 2,178 Notes payable 3,944 3,712 Total current assets $7,700 $4,950 Total current liabilities $4,640 $3,712 Net fixed assets Long-term bonds 5,672 4,538 Net plant and equipment 6,050 6,050 Total debt $10,312…The basis for classifying assets as current or noncurrent is conversion to cash within Select one: a. the operating cycle or one year, whichever is longer. b. the accounting cycle or one year, whichever is shorter. c. the accounting cycle or one year, whichever is longer. d. the operating cycle or one year, whichever is shorter.
- Which of the following statements is true? a. The fixed asset turnover ratio assists managers in determining the estimated future capital expenditures that are needed. b. The average age of the fixed assets is computed by dividing accumulated depreciation by depreciation expense. c. If net sales increases, the fixed asset turnover ratio will decrease. d. A relatively low fixed asset turnover ratio signals that a company is efficiently using its assets.[S1] Assuming total cashflows are equal for both assets, the asset with more cashflows in the latter years will be valued lower. [S2] As the discount rate increases, the value of the asset increases. a.Only S1 is true. b.Only S2 is true. c.Both S1 and S2 are true. d.Both S1 and S2 are false.An advantage that money has over other assets is that it: Answer a. Provides a higher return to the owner b. Is a safer asset to hold during times of inflation c. Increases in value over time d. Has lower transaction costs to use as a means of payment than other assets