3 finance question

Question:

 

70) Which of the following is most consistent with the hedging principle in working capital management?

 

     A.  Fixed assets should be financed with short-term notes payable.

 

     B.  Inventory should be financed with preferred stock.

 

     C.  Accounts receivable should be financed with short-term lines of credit.

 

     D.  Borrow on a floating rate basis to finance investments in permanent assets.

 

71) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?

 

            A.  Balance sheet

 

            B.  Income statement

 

            C.  Cash flow statement

 

            D.  Quarterly statement

 

72) Which of the following best represents the stream of income that is available to common stockholders?

 

     A.  Net profit after tax and after preferred dividend payments

 

     B.  Gross profit

 

     C.  Earnings before interest and taxes

 

     D.  Operating profit