Fin Module 2 Assignment Questions And Answers 100% Verified A+ Guaranteed

12. What is a firm's net income? {Ans: A. The difference between the sales and other income generated by the firm, and all costs, taxes, and expenses incurred by the firm in a given period B. The last or "bottom" line of the income statement C. A measure of the firm's profitability over a given period *D. All of the above*}5. The major components of common stockholders' equity are: {Ans: A. Cash, common stock, and paid-in surplus B. Common stock, paid-in surplus, and net income *C. Common stock, paid-in surplus, and retained earnings* D. Common stock, liabilities, and retained earnings}20. Lincoln Industries' current ratio is 1.5. Considered alone, which of the following actions would decrease the company's current ratio? {Ans: *A. Borrow using short-term notes payable and use the cash to increase inventories.* B. Use cash to reduce accruals. C. Use cash to reduce accounts payable. D. Use cash to reduce short-term notes payable}21. What does the firm's equity multiplier measure? {Ans: *A. The value of assets held per dollar of shareholder equity.* B. The return the firm has earned on its past investments. C. The firm's ability to sell a product for more than the