Answer for Chapter7 Receivables

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CHAPTER 7 Receivables KEY TERM average cost method The method of inventory costing that is based upon the assumption that costs should be charged against revenue by using the weighted average unit cost of the items sold.

first-in, first-out (FIFO) method The method of inventory costing based on the assumption that the costs

of merchandise sold should be charged against revenue in the order in which the costs were incurred.

gross profit method A method of estimating inventory cost that is based on the relationship of gross profit to sales.

inventory turnover The relationship between the volume of goods sold and inventory, computed by dividing the cost of goods sold by the average inventory.

last-in, first-out (LIFO) method A method of inventory costing based on the assumption that the most

recent merchandise inventory costs should be charged against revenue.

lower-of-cost-or-market (LCM) method A method of valuing inventory that reports the inventory at the lower of its

cost or current market value (replacement cost).

net realizable value The estimated selling price of an item of inventory less any direct costs of disposal, such as sales commissions.

number of days’ sales in inventory The relationship between the volume of sales and inventory, computed

by dividing the inventory at the end of the year by the average daily cost of goods sold.

physical inventory A detailed listing of merchandise on hand. retail inventory method A method of estimating inventory cost that is based on the relationship of gross profit to sales.

KEY POINT 1. Journalize the entries for the allowance method of accounting for uncollectibles, and estimate uncollectible receivables based on sales and on an analysis of receivables. A year-end adjusting entry provides for (1) the reduction of the value of the receivables to the amount of cash expected to be realized from them in the future and (2) the allocation to the current period of the expected expense resulting from such reduction. The adjusting entry debits Uncollectible Accounts Expense and credits Allowance for Doubtful Accounts. When an account is believed to be uncollectible, it is written off against the allowance account.

When the estimate of uncollectibles is based on the amount of sales for the fiscal period, the adjusting entry is made without regard to the balance of the allowance account. When the estimate of uncollectibles is based on the amount and the age of the receivable accounts at the end of the period, the adjusting entry is recorded so that the balance of the allowance account will equal the estimated uncollectibles at the end of the period.

The allowance account, which will have a credit balance after the adjusting entry has been posted, is a contra asset account. The uncollectible accounts expense is generally reported on the income statement as an administrative expense.

2. Describe the nature and characteristics of promissory notes. A note is a written promise to pay a sum of money on demand or at a definite time. Characteristics of notes that affect how they are recorded and reported include the due date, interest rate, and maturity value. The basic formula for computing interest on a note is: Principal X Rate X Time = Interest. The due date is the date a note is to be paid, and the period of time between the issuance date and the due date is normally stated in either days or months. The maturity value of a note is the sum of the face amount and the interest. 3. Journalize the entries for notes receivable transactions. A note received in settlement of an account receivable is recorded as a debit to Notes Receivable and a credit to Accounts Receivable. When a note matures, Cash is debited, Notes Receivable is credited, and Interest Revenue is credited. If the maker of a note fails to pay the debt on the due date, the note is said to be dishonored. When a note is dishonored, the maturity value of the note is debited to an accounts receivable account, while the face value is credited to Notes Receivable and Interest Revenue is credited for the difference. 4. Compute and interpret the accounts receivable turnover and the number of days' sales in receivables. The accounts receivable turnover is net sales divided by average accounts receivable. It measures how frequently accounts receivable are being converted into cash. The number of days' sales in receivables is the end-of-year accounts receivable divided by the average daily sales. It measures the length of time the accounts receivable have been outstanding.

(完整版)投资学第7版TestBank答案11

Multiple Choice Questions1.If you believe in the ________ form of the EMH, you believe that stock prices reflectall relevant information including historical stock prices and current public informationabout the firm, but not information that is available only to insiders.A)semistrongB)strongC)weakD)A, B, and CE)none of the aboveAnswer: A Difficulty: EasyRationale: The semistrong form of EMH maintains that stock prices immediatelyreflect all historical and current public information, but not inside information.2.Proponents of the EMH typically advocateA)an active trading strategy.B)investing in an index fund.C) a passive investment strategy.D) A and BE) B and CAnswer: E Difficulty: EasyRationale: Believers of market efficiency advocate passive investment strategies, andan investment in an index fund is one of the most practical passive investment strategies, especially for small investors.3.If you believe in the _______ form of the EMH, you believe that stock prices reflect allinformation that can be derived by examining market trading data such as the historyof past stock prices, trading volume or short interest.A)semistrongB)strongC)weakD)all of the aboveE)none of the aboveAnswer: C Difficulty: EasyRationale: The information described above is market data, which is the data set forthe weak form of market efficiency. The semistrong form includes the above plus allother public information. The strong form includes all public and private information.4.If you believe in the _________ form of the EMH, you believe that stock prices reflectall available information, including information that is available only to insiders.A)semistrongB)strongC)weakD)all of the aboveE)none of the aboveAnswer: B Difficulty: EasyRationale: The strong form includes all public and private information.5.If you believe in the reversal effect, you shouldA)buy bonds in this period if you held stocks in the last period.B)buy stocks in this period if you held bonds in the last period.C)buy stocks this period that performed poorly last period.D)go short.E) C and DAnswer: C Difficulty: EasyRationale: The reversal effect states that stocks that do well in one period tend to perform poorly in the subsequent period, and vice versa.6.__________ focus more on past price movements of a firm's stock than on theunderlying determinants of future profitability.A)Credit analystsB)Fundamental analystsC)Systems analystsD)Technical analystsE)All of the aboveAnswer: D Difficulty: EasyRationale: Technicians attempt to predict future stock prices based on historical stock prices.7._________ above which it is difficult for the market to rise.A)Book value is a valueB)Resistance level is a valueC)Support level is a valueD) A and BE) A and CAnswer: B Difficulty: EasyRationale: When stock prices have remained stable for a long period, these prices are termed resistance levels; technicians believe it is difficult for the stock prices to penetrate these resistance levels.8.___________ the return on a stock beyond what would be predicted frommarket movements alone.A)An excess economic return isB)An economic return isC)An abnormal return isD) A and BE) A and CAnswer: E Difficulty: EasyRationale: An economic return is the expected return, based on the perceived level of risk and market factors. When returns exceed these levels, the returns are called abnormal or excess economic returns.9.The debate over whether markets are efficient will probably never be resolvedbecause of ________.A)the lucky event issue.B)the magnitude issue.C)the selection bias issue.D)all of the above.E)none of the above.Answer: D Difficulty: EasyRationale: Factors A, B, and C all exist make rigid testing of market efficiencydifficult or impossible.10. A common strategy for passive management is ____________.A)creating an index fundB)creating a small firm fundC)creating an investment clubD) A and CE) B and CAnswer: A Difficulty: EasyRationale: The index fund is, by definition, passively managed. The other investment alternatives may or may not be managed passively.11.Arbel (1985) found thatA)the January effect was highest for neglected firms.B)the book-to-market value ratio effect was highest in JanuaryC)the liquidity effect was highest for small firms.D)the neglected firm effect was independent of the small firm effect.E)small firms had higher book-to-market value ratios.Answer: A Difficulty: ModerateRationale: Arbel divided firms into highly researched, moderately researched,and neglected groups based on the number of institutions holding the stock.12.Researchers have found that most of the small firm effect occursA)during the spring months.B)during the summer months.C)in December.D)in January.E)randomly.Answer: D Difficulty: ModerateRationale: Much of the so-called small firm effect simply may be the tax-effect as investors sell stocks on which they have losses in December and reinvest the funds in January. As small firms are especially volatile, these actions affect small firms in a more dramatic fashion.13.Malkiel (1995) calculated that the average alphas, or abnormal returns, on alarge sample of mutual funds between 1972 and 1991 wereA)significantly positive.B)significantly negative.C)statistically indistinguishable from zero.D)positive before 1981 and negative thereafter.E)negative before 1981 and positive thereafter.Answer: C Difficulty: ModerateRationale: Malkiel's study suggests that fund managers do not beat the market on a risk-adjusted basis.14.Basu (1977, 1983) found that firms with low P/E ratiosA)earned higher average returns than firms with high P/E ratios.B)earned the same average returns as firms with high P/E ratios.C)earned lower average returns than firms with high P/E ratios.D)had higher dividend yields than firms with high P/E ratios.E)none of the above.Answer: A Difficulty: ModerateRationale: Firms with high P/E ratios already have an inflated price relative toearnings and thus tend to have lower returns than low P/E ratio stocks. However, the P/E ratio may capture risk not fully impounded in market betas so this may represent an appropriate risk adjustment rather than a market anomaly.15.Jaffe (1974) found that stock prices _________ after insiders intensively bought shares.A)decreasedB)did not changeC)increasedD)became extremely volatileE)became much less volatileAnswer: C Difficulty: ModerateRationale: Insider trading may signal private information.16.Banz (1981) found that, on average, the risk-adjusted returns of small firmsA)were higher than the risk-adjusted returns of large firms.B)were the same as the risk-adjusted returns of large firms.C)were lower than the risk-adjusted returns of large firms.D)were unrelated to the risk-adjusted returns of large firms.E)were negative.Answer: A Difficulty: ModerateRationale: Banz found A to be true, although subsequent studies have attemptedto explain the small firm effect as the January effect, the neglected firm effect, etc.17.Proponents of the EMH think technical analystsA)should focus on relative strength.B)should focus on resistance levels.C)should focus on support levels.D)should focus on financial statements.E)are wasting their time.Answer: E Difficulty: ModerateRationale: Technical analysts attempt to predict future stock prices from historic stock prices; proponents of EMH believe that stock price changes are random variables.18.Studies of positive earnings surprises have shown that there isA) a positive abnormal return on the day positive earnings surprises are announced.B) a positive drift in the stock price on the days following the earningssurprise announcement.C) a negative drift in the stock price on the days following the earningssurprise announcement.D)both A and B are true.E)both A and C are true.Answer: D Difficulty: ModerateRationale: The market appears to adjust to earnings information gradually, resulting ina sustained period of abnormal returns.19.On November 22, 2005 the stock price of Walmart was $39.50 and the retailer stockindex was 600.30. On November 25, 2005 the stock price of Walmart was $40.25 and the retailer stock index was 605.20. Consider the ratio of Walmart to the retailer index on November 22 and November 25. Walmart is _______ the retail industry andtechnical analysts who follow relative strength would advise _______ the stock.A)outperforming, buyingB)outperforming, sellingC)underperforming, buyingD)underperforming, sellingE)equally performing, neither buying nor sellingAnswer: A Difficulty: ModerateRationale: 11/22: $39.50/600.30 = 0.0658; 11/25: $40.25/605.20 = 0.0665; Thus,K-Mart's relative strength is improving and technicians using this technique wouldrecommend buying.20.Work by Amihud and Mendelson (1986,1991)A)argues that investors will demand a rate of return premium to invest in lessliquid stocks.B)may help explain the small firm effect.C)may be related to the neglected firm effect.D) B and C.E)A, B, and C.Answer: E Difficulty: ModerateRationale: Lack of liquidity may affect the returns of small and neglected firms;however the theory does not explain why the abnormal returns are concentratedin January.21.Fama and French (1992) found that the stocks of firms within the highest decile ofmarket/book ratios had average monthly returns of _______ while the stocks offirms within the lowest decile of market/book ratios had average monthly returnsof________.A)greater than 1%, greater than 1%B)greater than 1%, less than 1%C)less than 1%, greater than 1%D)less than 1%, less than 1%E)less than 0.5%, greater than 0.5%Answer: C Difficulty: ModerateRationale: This finding suggests either that low market-to-book ratio firms arerelatively underpriced, or that the market-to-book ratio is serving as a proxy for arisk factor that affects expected equilibrium returns.22. A market decline of 23% on a day when there is no significant macroeconomic event______ consistent with the EMH because ________.A)would be, it was a clear response to macroeconomic news.B)would be, it was not a clear response to macroeconomic news.C)would not be, it was a clear response to macroeconomic news.D)would not be, it was not a clear response to macroeconomic news.E)none of the above.Answer: D Difficulty: ModerateRationale: This happened on October 19, 1987. Although this specific event is not mentioned in this edition of the book, it is an example of something that would be considered a violation of the EMH.23.In an efficient market, __________.A)security prices react quickly to new informationB)security prices are seldom far above or below their justified levelsC)security analysts will not enable investors to realize superior returns consistentlyD)one cannot make moneyE)A, B, and CAnswer: E Difficulty: EasyRationale: A, B, and C are true; however, even in an efficient market one should be able to earn the appropriate risk-adjusted rate of return.24.The weak form of the efficient market hypothesis asserts thatA)stock prices do not rapidly adjust to new information contained in past prices orpast data.B)future changes in stock prices cannot be predicted from past prices.C)technicians cannot expect to outperform the market.D) A and BE) B and CAnswer: E Difficulty: EasyRationale: Stock prices do adjust rapidly to new information.25. A support level is the price range at which a technical analyst would expect theA)supply of a stock to increase dramatically.B)supply of a stock to decrease substantially.C)demand for a stock to increase substantially.D)demand for a stock to decrease substantially.E)price of a stock to fall.Answer: C Difficulty: EasyRationale: A support level is considered to be a level below that the price of the stock is unlikely to fall and is believed to be determined by market psychology.26. A finding that _________ would provide evidence against the semistrong form ofthe efficient market theory.A)low P/E stocks tend to have positive abnormal returnsB)trend analysis is worthless in determining stock pricesC)one can consistently outperform the market by adopting the contrarianapproach exemplified by the reversals phenomenonD) A and BE) A and CAnswer: E Difficulty: ModerateRationale: Both A and C are inconsistent with the semistrong form of the EMH.27.The weak form of the efficient market hypothesis contradictsA)technical analysis, but supports fundamental analysis as valid.B)fundamental analysis, but supports technical analysis as valid.C)both fundamental analysis and technical analysis.D)technical analysis, but is silent on the possibility of successfulfundamental analysis.E)none of the above.Answer: D Difficulty: ModerateRationale: The process of fundamental analysis makes the market more efficient, and thus the work of the fundamentalist more difficult. The data set for the weak form of the EMH is market data, which is the only data used exclusively by technicians.Fundamentalists use all public information.28.Two basic assumptions of technical analysis are that security prices adjustA)rapidly to new information and market prices are determined by the interactionof supply and demand.B)rapidly to new information and liquidity is provided by security dealers.C)gradually to new information and market prices are determined by the interactionof supply and demand.D)gradually to new information and liquidity is provided by security dealers.E)rapidly to information and to the actions of insiders.Answer: C Difficulty: ModerateRationale: Technicians follow market data--price changes and volume of trading (asindicator of supply and demand) believing that they can identify price trends assecurity prices adjust gradually.29.Cumulative abnormal returns (CAR)A)are used in event studies.B)are better measures of security returns due to firm-specific events than areabnormal returns (AR).C)are cumulated over the period prior to the firm-specific event.D) A and B.E) A and C.Answer: D Difficulty: ModerateRationale: As leakage of information occurs, the accumulated abnormal returns that are abnormal returns summed over the period of interest (around the event date) are better measures of the effect of firm-specific events.30.Studies of mutual fund performanceA)indicate that one should not randomly select a mutual fund.B)indicate that historical performance is not necessarily indicative offuture performance.C)indicate that the professional management of the fund insures above market returns.D) A and B.E) B and C.Answer: D Difficulty: EasyRationale: Studies show that all funds do not outperform the market and thathistorical performance is not necessarily an indicator of future performance.31.The likelihood of an investment newsletter's successfully predicting the direction of themarket for three consecutive years by chance should beA)between 50% and 70%.B)between 25% and 50%.C)between 10% and 25%.D)less than 10%.E)greater than 70%.Answer: C Difficulty: ModerateRationale: The probability of successful prediction for 3 consecutive years is 23,or 12.5%.32.In an efficient market the correlation coefficient between stock returns fortwo non-overlapping time periods should beA)positive and large.B)positive and small.C)zero.D)negative and small.E)negative and large.Answer: C Difficulty: ModerateRationale: In an efficient market there should be no serial correlation betweenreturns from non-overlapping periods.33.The weather report says that a devastating and unexpected freeze is expected to hitFlorida tonight, during the peak of the citrus harvest. In an efficient market one would expect the price of Florida Orange's stock toA)drop immediately.B)remain unchanged.C)increase immediately.D)gradually decline for the next several weeks.E)gradually increase for the next several weeks.Answer: A Difficulty: ModerateRationale: In an efficient market the price of the stock should drop immediatelywhen the bad news is announced. If later news changes the perceived impact toFlorida Orange, the price may once again adjust quickly to the new information. Agradual change is a violation of the EMH.34. Matthews Corporation has a beta of 1.2. The annualized market return yesterday was13%, and the risk-free rate is currently 5%. You observe that Matthews had anannualized return yesterday of 17%. Assuming that markets are efficient, this suggests thatA) bad news about Matthews was announced yesterday.B) good news about Matthews was announced yesterday.C) no news about Matthews was announced yesterday.D) interest rates rose yesterday.E) interest rates fell yesterday.Answer: B Difficulty: ModerateRationale: AR = 17% - (5% + 1.2 (8%)) = +2.4%. A positive abnormal return suggests that there was firm-specific good news.th 35. Nicholas Manufacturing just announced yesterday that its 4 quarter earnings will be 10% higher than last year's 4th quarter. You observe that Nicholas had anabnormal return of -1.2% yesterday. This suggests thatA) the market is not efficient.B) Nicholas' stock will probably rise in value tomorrow.C) investors expected the earnings increase to be larger than what was actuallyannounced.D) investors expected the earnings increase to be smaller than what was actuallyannounced.E) earnings are expected to decrease next quarter.Answer: C Difficulty: ModerateRationale: Anticipated earnings changes are impounded into a security's price as soon as expectations are formed. Therefore a negative market response indicates that the earnings surprise was negative, that is, the increase was less than anticipated.36.When Maurice Kendall first examined stock price patterns in 1953, he found thatA)certain patterns tended to repeat within the business cycle.B)there were no predictable patterns in stock prices.C)stocks whose prices had increased consistently for one week tended to have anet decrease the following week.D)stocks whose prices had increased consistently for one week tended to have anet increase the following week.E)the direction of change in stock prices was unpredictable, but the amount ofchange followed a distinct pattern.Answer: B Difficulty: EasyRationale: The first studies in this area were made possible by the development of computer technology. Kendall's study was the first to indicate that marketswere efficient.37.If stock prices follow a random walkA)it implies that investors are irrational.B)it means that the market cannot be efficient.C)price levels are not random.D)price changes are random.E)price movements are predictable.Answer: D Difficulty: EasyRationale: A random walk means that the changes in prices are randomand independent.38.The main difference between the three forms of market efficiency is thatA)the definition of efficiency differs.B)the definition of excess return differs.C)the definition of prices differs.D)the definition of information differs.E)they were discovered by different people.Answer: D Difficulty: ModerateRationale: The main difference is that weak form encompasses historical data,semistrong form encompasses historical data and current public information, and strong form encompasses historical data, current public information, and inside information. All of the other definitions remain the same.39.Chartists practiceA)technical analysis.B)fundamental analysis.C)regression analysis.D)insider analysis.E)psychoanalysis.Answer: A Difficulty: EasyRationale: Chartist is another name for a technical analyst.40.Which of the following are used by fundamental analysts to determine properstock prices?I)trendlinesII)earningsIII)dividend prospectsIV) expectations of future interest ratesV)resistance levelsA)I, IV, and VB)I, II, and IIIC)II, III, and IVD)II, IV, and VE)All of the items are used by fundamental analysts.Answer: C Difficulty: ModerateRationale: Analysts look at fundamental factors such as earnings, dividend prospects, expectation of future interest rates, and risk of the firm. The information is used todetermine the present value of future cash flows to stockholders. Technical analysts use trendlines and resistance levels.41.According to proponents of the efficient market hypothesis, the best strategy for asmall investor with a portfolio worth $40,000 is probably toA)perform fundamental analysis.B)exploit market anomalies.C)invest in Treasury securities.D)invest in derivative securities.E)invest in mutual funds.Answer: E Difficulty: ModerateRationale: Individual investors tend to have relatively small portfolios and are usually unable to realize economies of size. The best strategy is to pool funds with other small investors and allow professional managers to invest the funds.42.Which of the following are investment superstars who have consistently shownsuperior performance?I)Warren BuffetII)Phoebe BuffetIII)Peter LynchIV) Merrill LynchV)Jimmy BuffetA)I, III, and IVB)II, III, and IVC)I and IIID)III and IVE)I, III, IV, and VAnswer: C Difficulty: ModerateRationale: Warren Buffet manages Berkshire Hathaway and Peter Lynch managed Fidelity's Magellan Fund. Phoebe Buffet is a character on NBC's and Jimmy Buffet is Away in Margaritaville. Merrill Lynch isn't a person.43.Google has a beta of 1.0. The annualized market return yesterday was 11%, and therisk-free rate is currently 5%. You observe that Google had an annualized returnyesterday of 14%. Assuming that markets are efficient, this suggests thatA)bad news about Google was announced yesterday.B)good news about Google was announced yesterday.C)no news about Google was announced yesterday.D)interest rates rose yesterday.E)interest rates fell yesterday.Answer: B Difficulty: ModerateRationale: AR = 14% - (5% + 1.0 (6%)) = +3.0%. A positive abnormal return suggests that there was firm-specific good news.44.Music Doctors has a beta of 2.25. The annualized market return yesterday was 12%,and the risk-free rate is currently 4%. You observe that Music Doctors had anannualized return yesterday of 15%. Assuming that markets are efficient, this suggests thatA)bad news about Music Doctors was announced yesterday.B)good news about Music Doctors was announced yesterday.C)no news about Music Doctors was announced yesterday.D)interest rates rose yesterday.E)interest rates fell yesterday.Answer: A Difficulty: ModerateRationale: AR = 15% - (4% + 2.25 (8%)) = -7.0%. A negative abnormal return suggests that there was firm-specific bad news.45.QQAG has a beta of 1.7. The annualized market return yesterday was 13%, and therisk-free rate is currently 3%. You observe that QQAG had an annualized returnyesterday of 20%. Assuming that markets are efficient, this suggests thatA)bad news about QQAG was announced yesterday.B)good news about QQAG was announced yesterday.C)no significant news about QQAG was announced yesterday.D)interest rates rose yesterday.E)interest rates fell yesterday.Answer: C Difficulty: ModerateRationale: AR = 20% - (3% + 1.7 (10%)) = 0.0%. A positive abnormal return suggests that there was firm-specific good news and a negative abnormal return suggests that there was firm-specific bad news.46.QQAG just announced yesterday that its th4 quarter earnings will be 35% higherthan last year's 4thquarter. You observe that QQAG had an abnormal return of -1.7% yesterday. This suggests thatA)the market is not efficient.B)QQAG stock will probably rise in value tomorrow.C)investors expected the earnings increase to be larger than what wasactually announced.D)investors expected the earnings increase to be smaller than what wasactually announced.E)earnings are expected to decrease next quarter.Answer: C Difficulty: ModerateRationale: Anticipated earnings changes are impounded into a security's price as soon as expectations are formed. Therefore a negative market response indicates that the earnings surprise was negative, that is, the increase was less than anticipated.47.LJP Corporation just announced yesterday that it would undertake an international jointventure. You observe that LJP had an abnormal return of 3% yesterday. This suggests thatA)the market is not efficient.B)LJP stock will probably rise in value again tomorrow.C)investors view the international joint venture as bad news.D)investors view the international joint venture as good news.E)earnings are expected to decrease next quarter.Answer: D Difficulty: Moderate48.Music Doctors just announced yesterday that its st1 quarter sales were 35% higherthan last year's 1stquarter. You observe that Music Doctors had an abnormal returnof -2% yesterday. This suggests thatA)the market is not efficient.B)Music Doctors stock will probably rise in value tomorrow.C)investors expected the sales increase to be larger than what was actually announced.D)investors expected the sales increase to be smaller than what wasactually announced.E)earnings are expected to decrease next quarter.Answer: C Difficulty: Moderate49.The Food and Drug Administration (FDA) just announced yesterday that they wouldapprove a new cancer-fighting drug from King. You observe that King had an abnormal return of 0% yesterday. This suggests thatA)the market is not efficient.B)King stock will probably rise in value tomorrow.C)King stock will probably fall in value tomorrow.D)the approval was already anticipated by the marketE)none of the above.Answer: D Difficulty: Moderate50.Your professor finds a stock-trading rule that generates excess risk-adjusted returns.Instead of publishing the results, she keeps the trading rule to herself. This is mostclosely associated with ________.A)regret avoidanceB)selection biasC)framingD)insider tradingE)none of the aboveAnswer: B Difficulty: Moderate51.At freshman orientation, 1,500 students are asked to flip a coin 20 times. One student iscrowned the winner (tossed 20 heads). This is most closely associated with ________.A)regret avoidanceB)selection biasC)overconfidenceD)the lucky event issueE)none of the aboveAnswer: D Difficulty: Moderate52.Sehun (1986) finds that the practice of monitoring insider trade disclosures, andtrading on that information, would be ________.A)extremely profitable for long-term tradersB)extremely profitable for short-term tradersC)marginally profitable for long-term tradersD)marginally profitable for short-term tradersE)not sufficiently profitable to cover trading costsAnswer: E53.If you believe in the reversal effect, you shouldA)sell bonds in this period if you held stocks in the last period.B)sell stocks in this period if you held bonds in the last period.C)sell stocks this period that performed well last period.D)go long.E) C and DAnswer: C Difficulty: EasyRationale: The reversal effect states that stocks that do well in one period tendto perform poorly in the subsequent period, and vice versa.。

米什金货币金融学英文版习题答案chapter 7英文习题

Economics of Money, Banking, and Financial Markets, 11e, Global Edition (Mishkin) Chapter 7 The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis7.1 Computing the Price of Common Stock1) A stockholder's ownership of a company's stock gives her the right toA) vote and be the primary claimant of all cash flows.B) vote and be the residual claimant of all cash flows.C) manage and assume responsibility for all liabilities.D) vote and assume responsibility for all liabilities.Answer: BAACSB: Analytical Thinking2) Stockholders are residual claimants, meaning that theyA) have the first priority claim on all of a company's assets.B) are liable for all of a company's debts.C) will never share in a company's profits.D) receive the remaining cash flow after all other claims are paid.Answer: DAACSB: Analytical Thinking3) Periodic payments of net earnings to shareholders are known asA) capital gains.B) dividends.C) profits.D) interest.Answer: BAACSB: Analytical Thinking4) The value of any investment is found by computing theA) present value of all future sales.B) present value of all future liabilities.C) future value of all future expenses.D) present value of all future cash flows.Answer: DAACSB: Analytical Thinking5) In the one-period valuation model, the value of a share of stock today depends uponA) the present value of both the dividends and the expected sales price.B) only the present value of the future dividends.C) the actual value of the dividends and expected sales price received in one year.D) the future value of dividends and the actual sales price.Answer: AAACSB: Analytical Thinking6) In the one-period valuation model, the current stock price increases ifA) the expected sales price increases.B) the expected sales price falls.C) the required return increases.D) dividends are cut.Answer: AAACSB: Reflective Thinking7) In the one-period valuation model, an increase in the required return on investments in equityA) increases the expected sales price of a stock.B) increases the current price of a stock.C) reduces the expected sales price of a stock.D) reduces the current price of a stock.Answer: DAACSB: Reflective Thinking8) In a one-period valuation model, a decrease in the required return on investments in equity causes a(n) ________ in the ________ price of a stock.A) increase; currentB) increase; expected salesC) decrease; currentD) decrease; expected salesAnswer: AAACSB: Reflective Thinking9) Using the one-period valuation model, assuming a year-end dividend of $0.11, an expected sales price of $110, and a required rate of return of 10%, the current price of the stock would beA) $110.11.B) $121.12.C) $100.10.D) $100.11Answer: CAACSB: Analytical Thinking10) Using the one-period valuation model, assuming a year-end dividend of $1.00, an expected sales price of $100, and a required rate of return of 5%, the current price of the stock would beA) $110.00.B) $101.00.C) $100.00.D) $96.19.Answer: DAACSB: Analytical Thinking11) In the generalized dividend model, if the expected sales price is in the distant futureA) it does not affect the current stock price.B) it is more important than dividends in determining the current stock price.C) it is equally important with dividends in determining the current stock price.D) it is less important than dividends but still affects the current stock price.Answer: AAACSB: Analytical Thinking12) In the generalized dividend model, a future sales price far in the future does not affect the current stock price becauseA) the present value cannot be computed.B) the present value is almost zero.C) the sales price does not affect the current price.D) the stock may never be sold.Answer: BAACSB: Analytical Thinking13) In the generalized dividend model, the current stock price is the sum ofA) the actual value of the future dividend stream.B) the present value of the future dividend stream.C) the present value of the future dividend stream plus the actual future sales price.D) the present value of the future sales price.Answer: BAACSB: Analytical Thinking14) Using the Gordon growth model, a stock's current price will increase ifA) the dividend growth rate increases.B) the growth rate of dividends falls.C) the required rate of return on equity rises.D) the expected sales price rises.Answer: AAACSB: Reflective Thinking15) Using the Gordon growth model, a stock's current price decreases whenA) the dividend growth rate increases.B) the required return on equity decreases.C) the expected dividend payment increases.D) the growth rate of dividends decreases.Answer: DAACSB: Reflective Thinking16) In the Gordon growth model, a decrease in the required rate of return on equityA) increases the current stock price.B) increases the future stock price.C) reduces the future stock price.D) reduces the current stock price.Answer: AAACSB: Reflective Thinking17) Using the Gordon growth formula, if D1 is $2.00, k e is 12% or 0.12, and g is 10% or 0.10, then the current stock price isA) $20.B) $50.C) $100.D) $150.Answer: CAACSB: Analytical Thinking18) Using the Gordon growth formula, if D1 is $1.00, k e is 10% or 0.10, and g is 5% or 0.05, then the current stock price isA) $10.B) $20.C) $30.D) $40.Answer: BAACSB: Analytical Thinking19) Using the Gordon growth model, if D1 is $.50, k e is 7%, and g is 5%, then the present value of the stock isA) $2.50.B) $25.C) $50.D) $46.73.Answer: BAACSB: Analytical Thinking20) One of the assumptions of the Gordon Growth Model is that dividends will continue growing at ________ rate.A) an increasingB) a fastC) a constantD) an escalatingAnswer: CAACSB: Analytical Thinking21) In the Gordon Growth Model, the growth rate is assumed to be ________ the required return on equity.A) greater thanB) equal toC) less thanD) proportional toAnswer: CAACSB: Analytical Thinking22) You believe that a corporation's dividends will grow 5% on average into the foreseeable future. If the company's last dividend payment was $5 what should be the current price of the stock assuming a 12% required return?Answer: Use the Gordon Growth Model.$5(1 + .05)/(.12 - .05) = $75AACSB: Analytical Thinking23) What rights does ownership interest give stockholders?Answer: Stockholders have the right to vote on issues brought before the stockholders, be the residual claimant, that is, receive a portion of any net earnings of the corporation, and the right to sell the stock.AACSB: Reflective Thinking7.2 How the Market Sets Stock Prices1) In asset markets, an asset's price isA) set equal to the highest price a seller will accept.B) set equal to the highest price a buyer is willing to pay.C) set equal to the lowest price a seller is willing to accept.D) set by the buyer willing to pay the highest price.Answer: DAACSB: Reflective Thinking2) Information plays an important role in asset pricing because it allows the buyer to more accurately judgeA) liquidity.B) risk.C) capital.D) policy.Answer: BAACSB: Analytical Thinking3) New information that might lead to a decrease in a stock's price might beA) an expected decrease in the level of future dividends.B) a decrease in the required rate of return.C) an expected increase in the dividend growth rate.D) an expected increase in the future sales price.Answer: AAACSB: Reflective Thinking4) A change in perceived risk of a stock changesA) the expected dividend growth rate.B) the expected sales price.C) the required rate of return.D) the current dividend.Answer: CAACSB: Reflective Thinking5) A stock's price will fall if there isA) a decrease in perceived risk.B) an increase in the required rate of return.C) an increase in the future sales price.D) current dividends are high.Answer: BAACSB: Reflective Thinking6) A monetary expansion ________ stock prices due to a decrease in the ________ and an increase in the ________, everything else held constant.A) reduces; future sales price; expected rate of returnB) reduces; current dividend; expected rate of returnC) increases; required rate of return; future sales priceD) increases; required rate of return; dividend growth rateAnswer: DAACSB: Reflective Thinking7) The global financial crisis lead to a decline in stock prices becauseA) of a lowered expected dividend growth rate.B) of a lowered required return on investment in equity.C) higher expected future stock prices.D) higher current dividends.Answer: AAACSB: Reflective Thinking8) Increased uncertainty resulting from the global financial crisis ________ the required return on investment in equity.A) raisedB) loweredC) had no impact onD) decreasedAnswer: AAACSB: Reflective Thinking7.3 The Theory of Rational Expectations1) Economists have focused more attention on the formation of expectations in recent years. This increase in interest can probably best be explained by the recognition thatA) expectations influence the behavior of participants in the economy and thus have a major impact on economic activity.B) expectations influence only a few individuals, have little impact on the overall economy, but can have important effects on a few markets.C) expectations influence many individuals, have little impact on the overall economy, but can have distributional effects.D) models that ignore expectations have little predictive power, even in the short run. Answer: AAACSB: Reflective Thinking2) The view that expectations change relatively slowly over time in response to new information is known in economics asA) rational expectations.B) irrational expectations.C) slow-response expectations.D) adaptive expectations.Answer: DAACSB: Analytical Thinking3) If expectations of the future inflation rate are formed solely on the basis of a weighted average of past inflation rates, then economists would say that expectation formation isA) irrational.B) rational.C) adaptive.D) reasonable.Answer: CAACSB: Analytical Thinking4) If expectations are formed adaptively, then peopleA) use more information than just past data on a single variable to form their expectations of that variable.B) often change their expectations quickly when faced with new information.C) use only the information from past data on a single variable to form their expectations of that variable.D) never change their expectations once they have been made.Answer: CAACSB: Reflective Thinking5) If during the past decade the average rate of monetary growth has been 5% and the average inflation rate has been 5%, everything else held constant, when the Federal Reserve announces that the new rate of monetary growth will be 10%, the adaptive expectation forecast of the inflation rate isA) 5%.B) between 5 and 10%.C) 10%.D) more than 10%.Answer: AAACSB: Reflective Thinking6) The major criticism of the view that expectations are formed adaptively is thatA) this view ignores that people use more information than just past data to form their expectations.B) it is easier to model adaptive expectations than it is to model rational expectations.C) adaptive expectations models have no predictive power.D) people are irrational and therefore never learn from past mistakes.Answer: AAACSB: Reflective Thinking7) In rational expectations theory, the term "optimal forecast" is essentially synonymous withA) correct forecast.B) the correct guess.C) the actual outcome.D) the best guess.Answer: DAACSB: Analytical Thinking8) If a forecast is made using all available information, then economists say that the expectation formation isA) rational.B) irrational.C) adaptive.D) reasonable.Answer: AAACSB: Analytical Thinking9) If a forecast made using all available information is NOT perfectly accurate, then it isA) still a rational expectation.B) not a rational expectation.C) an adaptive expectation.D) a second-best expectation.Answer: AAACSB: Analytical Thinking10) If expectations are formed rationally, then individualsA) will have a forecast that is 100% accurate all of the time.B) change their forecast when faced with new information.C) use only the information from past data on a single variable to form their forecast.D) have forecast errors that are persistently low.Answer: BAACSB: Analytical Thinking11) If additional information is not used when forming an optimal forecast because it is not available at that time, then expectations areA) obviously formed irrationally.B) still considered to be formed rationally.C) formed adaptively.D) formed equivalently.Answer: BAACSB: Analytical Thinking12) An expectation may fail to be rational ifA) relevant information was not available at the time the forecast is made.B) relevant information is available but ignored at the time the forecast is made.C) information changes after the forecast is made.D) information was available to insiders only.Answer: BAACSB: Analytical Thinking13) According to rational expectations theory, forecast errors of expectationsA) are more likely to be negative than positive.B) are more likely to be positive than negative.C) tend to be persistently high or low.D) are unpredictable.Answer: DAACSB: Analytical Thinking。

Chapter7复习

Chapter 7Business Markets and Business Buyer BehaviorMultiple Choice1.Business buyers tend to be more rational and _____ than consumer buyers.a.orderlyb.objectivec.subjectived.team-oriented(b; Easy)2.Each party in the buying process has subtle _____ and _____.a.expectations; needsb.behavior; proceduresc.roles; needsd.guidelines; roles(c; Moderate)3.In one way or another, most large companies sell to _____.a.consumersb.other organizationsc.employeesd.not-for-profit organizations(b; Moderate)4.As a purchasing agent, Benni Lopez buys goods and services for use in theproduction of other products and services that are sold and supplied to others.Benni is involved in _____.a.consumer buying behaviorb.corporate buying behaviorc.reseller buying behaviord.business buying behavior(d; Easy)5.Annie Laurie works for Arrow Star, a wholesaler and retailer of outdoor furniture.Her job is to acquire goods to resell and rent to other retailers and consumers at a profit. Annie is involved in _____.a.consumer buying behaviorb.corporate buying behaviorc.reseller buying behaviord.business buying behavior(d; Challenging)6.What can we say about the size of the business market compared to consumermarkets?a.It is approximately the same.b.It is smaller.c.It is huge.d.There is no need to compare them.(c; Easy)7.All of the following are differences between business and consumer markets exceptone. Which is it?a.market structure and demandb.nature of the buying unitc.type of credit extendedd.types of decisions and the decision process involved(c; Challenging)8.You have just realized after talking to a marketing analyst that many sets of _____purchases were made for only one set of _____ purchases.a.consumer; businessb.inexpensive; businessc.expensive; consumerd.business; consumer(d; Challenging)9.What can we say about business purchasers compared to the consumer purchasers?a.They deal with far fewer but far larger buyers.b.They are paid and the consumer is not paid for buying.c.Business buyers almost always work in committees.d.None of the above(a; Moderate)10.Adirondack Industries sells industrial supplies to markets in six states. The marketsare in major cities because the buyers tend to be geographically _____.a.dispersedb.concentratedc.homogeneousd.equidistant(b; Moderate)11.You now understand that business demand is ultimately derived from the demandfor consumer goods and is therefore called _____.a.elastic demandb.fluctuating demandc.derived demandd.joint demand(c; Easy)12.Kroger buys a lot of cranberry products at Christmas due to high consumer demand.This is an example of _____ demand.a.jointb.derivedc.elasticd.fluctuating(b; Moderate)13.Bartholomew Pharmacies sell certain prescription drugs that are not affected muchby price changes, especially in the short run. We say these products have what type of demand?a.jointb.derivedc.inelasticd.elastic(c; Moderate)14.It is because of _____ demand that many business goods and services tend tochange more – and more quickly – than the demand for consumer goods andservices.a.fluctuatingb.derivedc.inelasticd.elastic(a; Easy)pared with consumer purchases, a business purchase usually involves _____decision participants.a.better-trainedb.more professionalc.mored.all of the above(d; Moderate)16.What generally causes several people to become involved in a business purchasedecision? It is when the purchase is more _____.a.expensiveb.time consumingplexd.frequent(c; Easy)17.As a participant in the B2B market, you will be more _____ those from whom youbuy and those to whom you sell.a.friendly withb.dependent onc.professional withd.independent from(b; Moderate)rge business purchasers usually call for detailed product specifications, writtenpurchase orders, careful supplier searches, and formal approval. Because of this, we say the business buying process is more _____.a.formalizedb.professionalc.strategicd.time consuming(a; Easy)19.The owners of the company you work for have developed a core of suppliers andare working closely with them. This is an example of _____ management.a.channelb.supplier relationshipc.channel captaind.core channel(b; Easy)20.Business marketers keep a customer’s sales by meeting current needs and bypartnering with customers to help them _____.a.make moneyb.increase profitsc.solve their problemsd.please their customers(c; Challenging)21.At which level will marketers want to know how business buyers will respond tovarious marketing stimuli?a.basicb.intermediatec.advancedd.none of the above(a; Easy)22.As with consumer buying, the marketing stimuli for business buying consists ofproduct, price, place, and _____.a.precisionb.presellingc.promotiond.predetermined standards(c; Moderate)23.In a typical organization, buying activity consists of two major parts: the buying_____ and the buying _____.mittee; timeb.time; reorder pointc.economic order quantity; reorder pointd.center; decision process(d; Challenging)24.Choose the answer below that is not a factor that affects the buying center and thebuying decision process.a.internal organization factorsb.interpersonal factorsc.individual factorsd.intrepreneurial factors(d; Moderate)25.It is typical to find three major types of business buying situations. Choose theincorrect one from the list below.a.straight rebuyb.modified rebuyc.new taskd.All of the above are correct buying situations.(d; Easy)26.You purchase cleaning supplies for your custodial help regularly. Your coworkerremarks that the purchase of these supplies is handled on a routine basis. It istherefore a _____.a.modified rebuyb.new taskc.straight rebuyd.modified straight rebuy(c; Moderate)27.You call in a department manager to assist in a purchase of industrial equipment.You are considering a change in the product specifications, terms, and possibly suppliers. This sounds like a _____.a.modified rebuyb.new taskc.straight rebuyd.tough decision(a; Easy)28.The present production equipment on your assembly lines is outmoded andinefficient. The purchase of entirely new equipment is in order. After carefulsearching through numerous suppliers and gathering opinions from all relevant parties to the work, you are now ready to make this _____ purchase.a.modified rebuyb.new taskc.straight rebuyd.expensive(b; Challenging)29.Which business buying situation is the marketer’s greatest opportunity andchallenge?a.modified rebuyb.straight rebuyc.new taskd.multiple rebuys(c; Easy)30.You just lost a major account because a competitor beat you to the sale. The salewent to the firm because it provided the most complete system to meet thecustomer’s needs. You have just been reminded that competition beat you with _____.a.systems sellingb.team sellingc.great skilld.none of the above(a; Challenging)31.What is the decision-making unit of a buying organization called today?a.buying committeeb.buying centerc.buying teamd.lone ranger(b; Easy)32.By definition, a buying center consists of all the individuals and _____ thatparticipate in the business decision-making process.a.managersmitteesc.task forcesd.units(d; Easy)33.The buying center at Yugo Yogurt uses the services of a number of individuals. Itincludes the actual users, those who make the buying decisions, those who influence it, those who do the actually buying, and those who _____.a.pay the billb.control buying informationc.set the parametersd.none of the above(b; Moderate)34.This member of the buying center has formal or informal power to select or approvethe final suppliers. These individuals are often the buyers in routine buying.ersb.influencersc.gatekeepersd.deciders(d; Easy)35.A(n) _____ controls the flow of information to others in the buying center.erb.influencerc.buyerd.gatekeeper(d; Easy)36.Jonathan Myers helps define and set specifications for evaluating alternatives forpurchasing. He also provides information for evaluating the alternatives. In hisrole on the buying committee, Jonathan acts as a(n) _____.erb.influencerc.deciderd.gatekeeper(b; Moderate)37.Gretchen Kabor has formal authority to select the suppliers and arrange terms ofpurchase for many of the items her firm uses. Her role in the buying center is one of _____.erb.influencerc.buyerd.decider(c; Moderate)38. Alliance Hardware Stores, a regional chain of 48 stores in six states, presents amajor challenge for your manufacturing company. Their buying center must beunderstood by learning who participates in buying decisions, each participant’srelative influence, and the _____ each decision participant uses.a.evaluation criteriab.budgetary limitsc.management limitsd.personal bias(a; Challenge)39. The buying center is not a fixed and formally identified unit within the buyingorganization. Rather, it is a set of _____ assumed by different people for different purchases.a.budgetary limitsrmal job titlesc.buying rolesd.none of the above(c; Moderate)40. Sometimes, even the people in the buying center are not aware of all of the_____.a.product requirementsb.buying participantsc.supplier optionsd.constraints(b; Moderate)41. Business buyers react to both reason and emotion, therefore they respond to botheconomic and _____ factors.a.personalb.consumerc.supplierd.reseller(a; Easy)42. When suppliers’ offers are very similar, business buyers have little basis for strictly_____.a.emotional choiceb.rational choicec.price negotiationd.none of the above(b; Easy)43. When competing products differ greatly, business buyers are more accountable fortheir choices and tend to pay more attention to _____.a.economic factorsb.pricesc.rational choiced.negotiation(a; Moderate)44. Charles Swartz is a purchasing agent for Able and Cain Clothiers. As a buyer, hewill not be influenced by one of these basic factors.a.environmentalanizationalc.intrapersonald.individual(c; Moderate)45. The current and expected economic environment includes which of the followingbuyer influences?a.level of primary demandb.economic outlookc.the cost of moneyd.all of the above(d; Moderate)46. As of last week, Jayne Buois sees that economic uncertainty is rising. She hasdecided to take the advice of her business consultant, who tells her to cut back on new investments and attempt to _____.a.reduce the workforceb.reduce the inventoriesc.reduce wages and salariesd.reduce waste and install tighter controls(b; Challenging)47. Generally speaking, business buyers will hold inventories to a minimum, except inthe case of _____.a.low-cost itemsb.key/scarce materialsernment-regulated materialsd.imported materials(b; Easy)48. Choose the one question below that the marketer of business products would notanswer.a.Who are the people involved in the buying decision?b.What are their evaluative criteria?c.What are the company’s policies and limits on its buyers?d.Why will the consumer buy this?(d; Moderate)49. Interpersonal buying factors are difficult to manage because they are generally very_____.a.vagueb.clearc.subtled.easily misunderstood(c; Easy)50. Jorge Juarez will go through all of the stages of the buying process to add anadditional assembly line at work. Jorge is facing a _____ situation.a.straight rebuyb.modified rebuyc.new task buyingd.limited budget(c; Moderate)51. The buying process begins when someone in the company recognizes a _____.a.problem or unmet needb.customer complaintc.shortage of a goodd.changing demand(a; Challenging)52. Is it true that different business buyers have differing buying styles?a.falseb.truec.indeterminabled.not important(b; Easy)53. Business marketers often alert customers to potential problems and then show howtheir products provide solutions. What is this step in the business buying process?a.general need descriptionb.alternative evaluationsc.problem recognitiond.developing limits or constraints(c; Moderate)54. The purchasing agent at your company is working with engineers and users todefine the items to purchase by describing the characteristics and quantities topurchase. He is also ranking the importance of reliability, durability, and price.The buyer is preparing a _____.a.value analysisb.product specifications listc.general need descriptiond.purchase order(c; Challenging)55. This team decides on the best product characteristics and specifies them on thegeneral need description. They study their needs carefully to determine if they can redesign, standardize, or create a less costly method of production of the items.What is the team generating?a.value analysisb.general need descriptionc.purchase orderd.product specifications list(a; Moderate)56. When Future Now goes beyond searching for appropriate suppliers to generate asupplier-partner relationship over the long run, it can help bring more value to its customers. Future Now is engaged in _____.a.value analysisb.channel captainingc.supplier developmentd.supplier control(c; Moderate)57. The step following value analysis is _____.a.proposal solicitationb.supplier searchc.problem recognitiond.general need description(b; Easy)58. Suppliers have responsibilities in the supply chain. Which of the following is amajor responsibility?a.become listed in major directoriesb.build a good reputation in the marketplacec.become the channel captaind.both a and b(d; Moderate)59. The step following supplier search is _____.a.evaluate suppliersb.supplier selectionc.cost-benefit analysisd.none of the above(b; Easy)60. Jan Armstrong has developed the policy for her firm of using multiple sources ofsuppliers. All of the following are typical reasons to do so except one. Find it.a.to avoid being totally dependent on one supplierb.to allow comparison of prices over timec.to allow comparison of performance over timed.to find the lowest cost supplier(d; Moderate)61. Buyers may attempt to negotiate with preferred suppliers for better prices and termsbefore _____.a.orderingb.signing the contractc.making the final selection of suppliersd.paying(c; Moderate)62. When a buyer and supplier create a long-term agreement of supply of products asneeded at agreed prices for a set time period, they have created a _____.a.blanket contractb.negotiable instrumentc.binding purchase orderd.locked-in sale(a; Easy)63. A blanket order offers several benefits to the buyer. Which of the following is nota benefit?a.eliminates expensive renegotiating with each orderb.allows more, but smaller, ordersc.buys more items from the supplierd.eliminates inventory problems(d; Challenging)64. Following purchase, the buyer would monitor this phase of the new-task buyingsituation. The seller would also monitor the same factors used by the buyer.a.order-routine specificationsb.supplier selectionc.performance reviewd.value analysis(c; Moderate)65. The Internet has made it easy for sellers to put their purchasing requests online andinvite suppliers to bid for the business through what is called _____.a.online buyingb.biddingc.Internet tradingd.reverse auctions(d; Easy)66. Jay’s Big and Tall Men’s chain of clothing and shoe stores enjoys e-procurement.As a buyer, the store enjoys all of these benefits except one.a.greater access to new suppliersb.lowers purchasing costsc.hastens order processing and deliveryd.reduces payroll(d; Moderate)67. B2B e-procurement yields many benefits. Are any of these not a benefit to buyers?a.shaves transaction costsb.results in more efficient purchasing for both buyers and sellersc.eliminates inventory problemsd.reduces order processing costs(c; Moderate)68. Hewlett Packard has stated that, “The first advantage of e-procurement is clearlythe _____ that we are _____.”a.faster service; receivingb.lower prices; payingc.better terms; negotiatingd.lower inventory; encountering(b; Challenging)69. E-procurement offers other advantages to purchasing professionals, such as it_____.a.reduces drudgeryb.reduces paperworkc.allows more time managing inventoryd.all of the above(d; Easy)70. E-procurement offers other advantages to purchasing professions, such as _____.a.allowing time to focus on value-added activitiesb.working creatively with suppliersc.more time to develop/acquire new productsd.all of the above(d; Challenging)71. A problem with the rapidly expanding use of e-purchasing is that it _____.a.erodes decades-old customer-supplier relationshipsb.saves less time than expectedc.generates more transactions to documentd.generates less cost savings than predicted(a; Moderate)72. You have discovered, like most other firms that buy online, the leading barrier toexpanding electronic links with customers and partners. What is it?a.costb.trained personnelc.securityck of knowledge(c; Easy)73. The two common nonbusiness markets are _____ and _____.a.institutional; not-for-profiternment; not-for-profitc.institutional; governmentd.nonprofit; government(c; Moderate)74. Green Tree Suppliers serves schools, hospitals, nursing homes, and prisons.Management at Green Tree is involved in the _____ market.ernmentb.not-for-profitc.locald.institutional(d; Easy)75. Many institutional markets are characterized by _____ and _____.a.low budgets; vague criteriab.special needs; vague criteriac.low budgets; captive patronsd.captive patrons; limited access(c; Challenging)76. Your firm will start exporting to Korea. In Korea, like in most countries, the _____market is the major buyer of goods and services.a.institutionalernmentc.corporated.lower class(b; Easy)77. What must the marketer to governments need to know?a.who the key decision makers areb.identify the factors that affect buyer behaviorc.understand the buying processd.all of the above(d; Moderate)78. Government organizations tend to favor _____ suppliers over _____ suppliers—arule of thumb that marketers need to know.a.local; domesticb.foreign; localc.foreign; domesticd.domestic; foreign(d; Easy)79. What is the unique thing about government buying?a.It is carefully watched by outside publics.b.the bidding processc.long payment periods for purchasesd.much paperwork and red tape(a; Moderate)80. Disadvantages to selling to the government include all of the following except one.a.considerable paperworkb.bureaucracyc.regulationsd.low sales volume(d; Easy)81. Disadvantages in selling to the government include all of the following except one.a.decision-making delaysb.frequent shifts in procurement personnelc.confusing regulationsd.low sales volume(d; Moderate)82. Most governments provide would-be suppliers with _____ describing how to sell tothe government.a.detailed guidesb.procurement documentsc.proposalsd.contract forms(a; Challenging)83. _____ also play a growing role in government buying.a.Procurement personnel shiftsb.Noneconomic criteriac.Online proposalsd.None of the above(b; Easy)84. Which of the following is perhaps the greatest factor in government buying?a.priceb.product differentiationc.advertisingd.personal selling(a; Moderate)85. Total government spending is determined by _____ rather than by any _____ todevelop this market.a.price; elected officialsb.elected officials; contractual agreementsc.elected officials; marketing effortd.marketing effort; elected officials(c; Challenging)86. During the past decade, some of the government’s buying has _____.a.gone onlineb.become more complicatedc.generated more paperworkd.created buying centers with additional staff(a; Easy)87. After reading a trade publication at work, you as chief purchasing agent atTideWell Electronics, have discovered that the largest market in the United States is the _____ market.a.consumerb.institutionc.businessernment(c; Moderate)True – False88. A business buyer buys goods and services for use in the production of otherproducts and services that are sold, rented, or supplied to others. It also includesretailers and wholesalers who acquire goods for reselling or renting.(True; Easy)89. The main differences between business and consumer markets include marketstructure and demand, the nature of the buying unit, the types of decisions, and the amount of money spent annually.(False; Moderate)90. In its most simple terms, the business buying process consists of business buyersdetermining which products and services their organizations need to purchase, and then finding, evaluating, and choosing among alternative suppliers and brands. (True; Moderate)91. Your company manufactures and sells sophisticated machine shop equipment to thebusiness market. Since you sell to buyers in major cities, you see that businessmarkets are geographically concentrated.(True; Easy)92. Although business demand is generally derived demand, it may turn into jointdemand.(False; Easy)93. Business demand ultimately derives from the demand for other business goods andservices.(False; Moderate)94. Business markets have more fluctuating demand than consumer markets. (True; Easy)95. You work for a major corporation and find that business purchases usually involvemore decision participants and a more professional purchasing effort.(True; Moderate)96. You have noticed that business marketers build close long-run relationships withcustomers compared to the consumer marketer.(True; Easy)97. Not only do many firms use customer relationship management, they are usingsupplier relationship management to become more efficient.(True; Moderate)98. In the long run, business marketers keep a customer’s sales by meeting currentneeds and providing satisfactory customer service.(False; Moderate)99. Rob Taylor is the buyer for Major Memories. He regularly orders inexpensivemerchandise in a fairly routine fashion without any modifications. He may choose other suppliers from time to time. Rob’s decisions take the form of modified rebuy. (False; Challenging)100. Many business buyers prefer to buy a packaged solution to a problem from a single seller. This is called systems selling.(True; Easy)101. The decision-making unit of a buying organization is called the purchasing department.(False; Moderate)102. Nancy Chan works for LeBray Beverage Company. She often helps to define product specifications and also provides information for evaluating alternatives. In this role she is acting as a gatekeeper.(False; Moderate)103. This person in the purchase decision process controls the flow of information to others involved. This role is that of an influencer.(False; Easy)104. Today, most B2B marketers recognize that emotion plays an important role in business buying decisions.(True; Easy)105. Typical factors in the economic environment that influence buying decisions include level of primary demand; the economic outlook; the cost of money;shortages of key, trained personnel; and technological, political, and competitive developments.(False; Challenging)106. Buyers have different buying styles influenced by personal factors such as age, income, education, professional identification, and attitudes toward risk. We call these individual factors on the buying process.(True; Easy)107. When a business buyer prepares a statement describing the characteristics and quantity of the items needed, he or she has created a product specificationdescription.(False; Moderate)108. After completing a supplier search, it is important to develop a system of supplier-partners that can help bring more value to customers. To accomplish this youwould initiate supplier development.(True; Easy)109. Proposals should be marketing documents and not just technical documents. (True; Easy)110. When conducting a performance review, the seller must monitor the same factors used by the buyer to make sure that the seller is giving the expected satisfaction. (True; Moderate)111. This method of B2B buying is growing rapidly and is conducted online. It is often called e-procurement.(True; Easy)112. B2B e-procurement yields the following benefits: 1) reduces transaction costs, 2) reduces order processing costs, 3) more efficient purchasing for both buyers and suppliers, 4) increases the time between order and delivery.(False; Moderate)113. This method of B2B buying reduces drudgery and paperwork, allows more time to spend on value-added activities and developing new products. This sounds likeusing only one trained professional to do all of the buying, thus freeing upmanagement.(False; Challenging)114. Your firm sells plastic utensils and paper goods to schools, hospitals, nursing homes, prisons, and jails. You are involved in the institutional market.(True; Easy)115. Your foreign operations can supply the Federal Government with lower prices than the competition. You now have a marketing decision to make because yourdomestic operation is not as competitive as other U.S. suppliers. The problem is that government organizations tend to favor domestic suppliers over foreignsuppliers.(True; Moderate)116. Most governments provide would-be suppliers with detailed guides describing how to sell to the government.(True; Easy)117. It is rare that noneconomic factors such as depressed business firms, minority-owned firms, or small business firms play a role in government buying. (False; Moderate)118. Total government spending is determined by elected officials rather than by any marketing effort to develop this market.(True; Easy)Essay119. Briefly describe the characteristics of business markets.The business marketer normally deals with far fewer but far larger buyers than the consumer marketer does. These markets are more geographically concentrated and the demand is derived demand. Many markets have inelastic demand; that is, total demand for many business products is not affected much by price change. These markets have more fluctuating demand than consumer goods.A business purchase decision usually involves more decision participants and amore professional purchasing effort. Business buyers usually face more complex buying decisions with a buying process that is more formalized. Many companies practice supplier relationship management. In the long run, business marketerskeep a customer’s sales by meeting current needs and by partnering with customers to help them solve their problems.(Challenging; p. 172-173)。

会计专业英语课后答案 Answer for lesson3

Answer for Chapter 33.1 Select the best answer for each of the following unrelated items1.c2. b3. b4. d5.b6. c7.c8.a9.b 10.b11d 12d 13b 14d 15 a 16d 17b 18 c 19 b 20c3.2Prepare an income statementWindsor Corporation had the information listed below available in preparing an income statement for the year ended December 31, 2X11. All amounts are before income taxes. Assume a 30% income tax rate for all items.Sales ₤ 600,000Income from operation of discontinued cement division ₤ 100,000Loss from disposal of cement division ₤ (80,000)Operating expenses ₤ 125,000Gain on sale of equipment ₤ 65,000Cost of goods sold ₤ 420,000EnquiredPrepare an income statement in good form which takes into account intra-period income tax allocation.SolutionWINDSOR CORPORA TIONIncome Statementor the Year Ended December 31, 2011 ———————————————————————————————————————————Sales ................................................................................................................. ₤600,000Cost of goods sold ............................................................................................. 420,000 Gross profit ........................................................................................................ 180,000 Operating expenses ............................................................................................ 125,000 Income from operations ..................................................................................... 55,000 Other income and expenseGain on sale of equipment ....................................................................... 65,000 Income before income taxes .............................................................................. 120,000 Income taxes ...................................................................................................... 36,000 Income from continuing operations ................................................................... 84,000 Discontinued operationsIncome from operation of discontinued cementdivision, net of $30,000 income taxes ................................................. ₤70,000Loss from disposal of cement division,net of $24,000 income tax savings ...................................................... (56,000) 14,000 Net income ......................................................................................................... ₤98,0003.3 Prepare the retained earnings statementThe balance in retained earnings on January 1, 20X1, for Blakely Inc., was $600,000. During the year, the corporation paid cash dividends of $70,000 and distributed a share dividend of $15,000. In addition, the company determined that it had overstated its depreciation expense in prior years by $50,000. Net income for 20X1 was $120,000.EnquiredPrepare the retained earnings statement for 20X1.SolutionBLAKEL Y INC.Retained Earnings StatementFor the Y ear Ended December 31, 20X1Balance, January 1 as reported $600,000 Correction for understatement of net incomein prior period (depreciation expense error) 50,000 Balance, January 1, as adjusted 650,000 Add: Net income 120,000770,000 Less: Cash dividends $70,000Share dividend 15,000 85,000 Balance, December 31 $685,0003.4 Prepare fiancial statementsThese financial statement items (in thousands) are for Chen Company at year-end, July 31, 2X11.Salaries payable ¥4,580 Note payable (long-term) ¥3,300Salaries expense 45,700 Cash 22,200Utilities expense 19,100 Accounts receivable 9,780Equipment 22,000 Accumulated depreciation 6,000Accounts payable 4,100 Dividends 4,000 Commission revenue 56,100 Depreciation expense 4,000Rent revenue 6,500 Retained earnings (1/1/2X11) 30,000Share capital-ordinary 16,200Enquired(a) Prepare an income statement and a retained earnings statement for the year.(b) Prepare a classified statement of financial position at July 31, 2X11.Solution(a) CHEN COMPANYIncome StatementFor the Year Ended July 31, 2X11 ———————————————————————————————————————————RevenuesCommission revenue .................................................................................... ¥56,100Rent revenue ................................................................................................. 6,500 Total revenues ...................................................................................... ¥62,600 ExpensesSalaries expense ............................................................................................ 45,700Utilities expense ........................................................................................... 19,100Depreciation expense .................................................................................... 4,000Total expense........................................................................................ 68,800 Net loss ................................................................................................................... ¥ (6,200)CHEN COMPANYRetained Earnings StatementFor the Year Ended July 31, 2X11 ———————————————————————————————————————————Retained Earnings, August 1, 2X10 ............................................................................. ¥30,000 Less: Net loss ..................................................................................................... ¥6,200 Dividends ...................................................................................................... 4,000 10,200 Retained Earnings , July 31, 2X11 .......................................................................... ¥18,800(b) CHEN COMPANYStatement of Financial PositionJuly 31, 2X11 ———————————————————————————————————————————AssetsProperty, plant, and equipmentEquipment..................................................................................................... ¥22,000Less: Accumulated depreciation ................................................................... 6,000 ¥16,000 Current assetsAccounts receivable ...................................................................................... 9,780Cash ............................................................................................................ 22,20031,980 Total assets ............................................................................................ ¥47,980Equity and LiabilitiesEquityShare capital-ordinary………………………………………………… ¥16,200Retained earnings ......................................................................................... 18,800 ¥35,000 Long-term liabilitiesNote payable ................................................................................................. 3,300 Current liabilitiesAccounts payable .......................................................................................... ¥4,100Salaries payable ............................................................................................ 4,580 8,680 Total equity and liabilities ....................................................................................... ¥47,9803.5 Prepare a statement of cash flowsA comparative statement of financial position for Mann Company appears below:MANN COMPANYComparative Statement of Financial PositionDec. 31, 2Y11 Dec. 31, 2Y10AssetsEquipment €60,000 €32,000Accumulated depreciation—equipment (20,000) (14,000) Long-term investments -0- 18,000 Prepaid expenses 6,000 9,000 Inventory 25,000 18,000 Accounts receivable 18,000 14,000 Cash 27,000 10,000 Total assets €116,000€87,000Equity and LiabilitiesShare capital-ordinary € 40,000€23,000 Retained earning 22,000 10,000 Bonds payable 37,000 47,000 Accounts payable 17,000 7,000 Total equity and liabilities €116,000€87,000 Additional information:1. Net income for the year ending December 31, 2Y11 was €27,000.2. Cash dividends of €15,000 were declared and paid during the year.3. Long-term investments that had a cost of €18,000 were sold for €14,000.4. Sales for 2Y11 were €120,000.EnquiredPrepare a statement of cash flows for the year ended December 31, 2Y11, using the indirect method.SolutionMANN COMPANYStatement of Cash FlowsFor the Year Ended December 31, 2Y11Cash flows from operating activitiesNet income .................................................................................................. €27,000Adjustments to reconcile net income to net cash provided byoperating activities:Depreciation expense ....................................................................... € 6,000Loss on sale of long-term investments ............................................... 4,000Increase in accounts receivable ........................................................ (4,000)Decrease in prepaid expenses ........................................................... 3,000Increase in inventories ...................................................................... (7,000)Increase in accounts payable ............................................................ 10,000 12,000Net cash provided by operating activities ........................................ 39,000 Cash flows from investing activitiesSale of long-term investments .................................................................... 14,000Purchase of equipment ................................................................................ (28,000)Net cash used by investing activities ................................................ (14,000) Cash flows from financing activitiesIssuance of ordinary shares ......................................................................... 17,000Retirement of bonds payable ...................................................................... (10,000)Payment of cash dividends ......................................................................... (15,000)Net cash used by financing activities ............................................... (8,000) Net increase in cash .............................................................................................. 17,000 Cash at beginning of period .................................................................................. 10,000 Cash at end of period ............................................................................................€27,0003.6 Perform vertical analysisDecember 31, 2X12December 31, 2X11Inventory€ 780,000 € 600,000 Accounts receivable 510,000 400,000 Total assets 3,000,0002,500,000EnquiredUsing these data from the comparative statement of financial position of Luca Company perform vertical analysis. Solution Dec. 31, 2012Dec. 31, 2011Amount Percentage*Amount Percentage**Inventory€ 780,000 26% € 600,000 24% Accounts receivable 510,000 17% 400,000 16% Total assets 3,000,000100.0%2,500,000100.0%€€780,000.263,000,000=€€600,000.242,500,000=€€510,000.173,000,000=€€400,000.162,500,000=3.7 Perform horizontal analysisComparative information taken from the Wells Company financial statements is shown below: 2X12 2X11 (a) Notes receivable $ 20,000 $ -0-(b) Accounts receivable 175,000 140,000 (c) Retained earnings 30,000 (40,000) (d) Income taxes payable 45,000 20,000 (e) Sales900,000 750,000 (f)Operating expenses170,000200,000EnquiredUsing horizontal analysis, show the percentage change from 2X11 to 2X12 with 2X11 as the base year. Solution (a) Base year is zero. Not possible to compute. (b) $35,000 ÷ $140,000 = 25% increase(c) Base year is negative. Not possible to compute. (d) $25,000 ÷ $20,000 = 125% increase (e)$150,000 ÷ $750,000 = 20% increase***(f) $30,000 ÷ $200,000 = 15% decrease3.8 Perform horizontal analysisThe following items were taken from the financial statements of Ritz, Inc., over a four-year period:Item 2Y12 2Y11 2Y10 2Y09Net Sales €800,000€650,000€600,000€500,000Cost of Goods Sold 580,000 460,000 420,000 400,000Gross Profit €220,000€190,000€180,000€100,000EnquiredUsing horizontal analysis and 2Y09 as the base year, compute the trend percentages for net sales, cost of goods sold, and gross profit. Explain whether the trends are favorable or unfavorable for each item.SolutionItem 2Y12 2Y11 2Y10 2Y09Net Sales 160% 130% 120% 100%Cost of Goods Sold 145% 115% 105% 100%Gross Profit 220% 190% 180% 100%The trend in net sales is increasing and favorable. The cost of goods sold trend is increasing which could be unfavorable, but the sales are increasing each year at a faster pace than cost of goods sold. This is apparent by examining the gross profit percentages, which show a favorable, increasing trend.3.9 Analysis the liquidity of the Howell CompanyHowell Company has the following selected accounts after posting adjusting entries:Accounts Payable € 55,000Notes Payable, 3-month 80,000Accumulated Depreciation—Equipment 14,000Salary Payable 27,000Notes Payable, 5-year, 8% 30,000Estimated Warranty Liability 34,000Salary Expense 6,000Interest Payable 3,000Mortgage Payable 200,000Sales Tax Payable 21,000Enquired(a) Prepare the current liability section of Howell Company's statement of financial position, assuming $25,000of the mortgage is payable next year. List liabilities in magnitude order, with largest first.(b) Comment on Howell 's liquidity, assuming total current assets are €450,000.Solution(a) HOWELL COMPANYCurrent LiabilitiesNotes payable, 3-month € 80,000Accounts payable 55,000Estimated warranty liability 34,000Salary payable 27,000Long-term debt due within one year 25,000Sales tax payable 21,000Interest payable 3,000Total Current Liabilities €245,000(b) The liquidity position looks favorable. If all current liabilities are paid out of current assets, there would stillbe €205,000 of current assets. The current assets are almost twice the current liabilities and it appears as though Howell Company has sufficient current resources to meet current obligations when due.3.10 Calculate the debt to total assets and times interest earned ratiosFranco Corporation reports the following selected financial statement information at December 31, 2X11: Total Assets $110,000Total Liabilities 65,000Net Income 18,000Interest Income 1,600Interest Expense 900Tax Expense 300EnquiredCalculate the debt to total assets and times interest earned ratios.SolutionDebt to total assets: $65,000 ÷ $110,000 = 59%Times interest earned: ($18,000 + $900 + $300) ÷ $900 = 21.33 times3.11 Compute the receivables turnover and the average collection periodBerman Company reported the following financial information:12/31/2X11 12/31/2X10Accounts receivable $ 320,000 $ 360,000Net credit sales 2,550,000 2,420,000EnquiredCompute (a) the receivables turnover and (b) the average collection period for 2X11.Solution(a) Receivables turnover = $2,550,000 ÷ $340,000 = 7.5 times(b) Average collection period = 365 ÷ 7.5 = 49 days3.12 Calculate the net income and EPSBanks Company is considering two alternatives to finance its purchase of a new $4,000,000 office building.(a) Issue 400,000 ordinary shares at $10 per share.(b) Issue 8%, 10-year bonds at par ($4,000,000).Income before interest and taxes is expected to be $3,000,000. The company has a 30% tax rate and has 600,000 ordinary shares outstanding prior to the new financing.EnquiredCalculate each of the following for each alternative:(1) Net income.(2) Earnings per share.Solution(a) Issue Shares (b) Issue BondsIncome before interest and taxes $3,000,000 $3,000,000Interest (8% × $4,000,000) —320,000Income before income taxes 3,000,000 2,680,000Income tax expense 900,000 804,000(1) Net income $2,100,000 $1,876,000Shares outstanding 1,000,000 600,000(2) Earnings per share $2.10 $3.133.13 Compute the return on ordinary shareholders’ equity ratioThe following information is available for Ritter Corporation:2Y11 2Y10 Average ordinary shareholders’ equity$1,500,000 $1,000,000Average total shareholders’ equity 2,000,000 1,500,000Ordinary dividends declared and paid 72,000 50,000Preference dividends declared and paid 30,000 30,000Net income 330,000 270,000EnquiredCompute the return on ordinary shareholders’ equity ratio for both years. Briefly commen t on your findings.Solution2Y10 2Y11Return on ordinaryshareholders’ equity ratio:$270,000 – $30,000 $330,000 – $30,000————————— = 24% ————————— = 20%$1,000,000 $1,500,000Ritter’s return on common stockholders’ equity ratio decreased approximately 17% during 2011. Ritter’s earnings increased during 2011 by 22%, but its average ordinary shareholders’ equity increased by 50%, causing the return on ordinary shareholders’ equity to declin e by 17%.3.14 Calculate book value per shareBellingham Corporation has the following equity balances at December 31, 2X11.Share Capital–Ordinary, $1 par $ 3,500Share Premium–Ordinary 24,500Retained Earnings 62,500Total $90,500EnquiredCalculate book value per share.SolutionNumber of shares outstanding: $3,500/$1 = 3,500Book value per share: $90,500/3,500 = $25.863.15 Calculate financial ratiosSelected information from the comparative financial statements of Fryman Company for the year ended December 31 appears below:2X11 2X10Inventory $ 140,000 $160,000Accounts receivable (net) 180,000 200,000Total assets 1,200,000 800,000Long-term debt 400,000 300,000Current liabilities 140,000 110,000Net credit sales 1,330,000 700,000Cost of goods sold 900,000 530,000Interest expense 50,000 25,000Income tax expense 60,000 29,000Net income 150,000 85,000EnquiredAnswer the following questions relating to the year ended December 31, 2X11. Show computations.1. Inventory turnover for 2X11 is __________.2. Times interest earned in 2X11 is __________.3. The debt to total assets ratio for 2X11 is __________.4. Receivables turnover for 2X11 is __________.5. Return on assets for 2X11 is __________.Solution$900,0001. Inventory turnover for 2011 is 6 times. ———————————— = 6 times.($140,000 + $160,000) ÷ 2$150,000 + $60,000 + $50,0002. Times interest earned in 2011 is 5.2 times. —————————————— = 5.2 times.$50,000$140,000 + $400,0003. The debt to total assets ratio for 2011 is 45%. —————————— = 45%.$1,200,000$1,330,0004. Receivables turnover for 2011 is 7 times. ———————————— = 7 times.($180,000 + $200,000) ÷ 2$150,0005. Return on assets for 2011 is 15%. ————————————— = 15%.($1,200,000 + $800,000) ÷ 2。

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