EASY:
The amount of cash that a firm keeps on hand in order to take advantage of any bargain
purchases that may arise is referred to as its
A. Transactions balance.
C. Precautionary balance.
B. Compensating balance.
D. Speculative balance.
The principal purpose of taxation is
a. To encourage the growth of home industries through the proper use of tax exemptions
and tax incentives
b. To implement the police power of the state
c. The reduce excessive inequalities of wealth
d. To raise revenues for governmental needs
The long-term planning process for making and financing investments that affect a company’s
financial results over a number of years is referred to as
A. capital budgeting
C. master budgeting
B. strategic planning
D. long-range planning
Which of the following is not a source of long-term financing?
A. Common Stocks
C. Preferred Stocks
B. Bonds
D. Floating Lien
AVERAGE
MCNP-ISAP is planning to issue 20M bonds at an effective rate of 10%. The company pays
income tax at a rate of 30%. What is the cost of the capital?
A. 10%
C. 3%
B. 7%
D. 13%
In order to phase-out a huge deficit, The President of the Philippines passed a law offering
all the taxpayers with previous tax delinquency to pay a minimum tax in exchange for relief
from tax assessment in the period of delinquency. Is this a valid exercise of taxation power?
a. Yes, because the measure adopted grounded upon necessity
b. Yes, because the president is merely exercising his presidential discretion.
c. No, because the power of taxation is non delegated.
d. No, because only the Department of Finance can issue such ruling.
On December 1, 2015, ISAP and MCNP formed a partnership, agreeing to share for profits and
losses in the ratio 2:3, respectively. ISAP invested parcel of land that cost him P25,000. MCNP
invested P30,000 cash. The was sold for P50,000 on the same date, three hours after the
formation of the partnership. How much should be the capital balance of ISAP right after the
formation?
a. 25,000
c. 60,000
b. 30,000
d. 50,000
DIFFUCULT
Frostfell Airlines is expected to pay an upcoming dividend of $3.29. The company's
dividend is expected to grow at a steady, constant rate of 5% well into the future. Frostfell
currently has 1,600,000 shares of common stock outstanding. If the required rate of return
for Frostfell is 12%, what is the best estimate for the current price of Frostfell's common
stock?
A. $65.80
B. $62.51
C. $47.00
D. $27.41
CBEM is trying to decide whether to accept a salary of P40,000 or a salary of P25,000 plus a
bonus of 10% 0f net income after salary and bonus as a means of allocating profit among the
partners. Salaries traceable to the other partners are estimated to be P100,000. What amount
of income would be necessary so that CBEM would consider the choices to be equal?
a. 165,000
c. 265,000
b. 290,000
d. 305,000
Where the operating cycle extends beyond one year because of normal credit terms as
in the case of installment sales of household appliances
a. it is proper to classify the entire receivables as current assets with the disclosure of
the amount of realizable within one year, if material.
b. The entire receivables are shown as noncurrent assets
c. The portion due in one year is shown as current and the balance as noncurrent
d. the receivables are not recognized