Quiz Ch 04 – T/F Market Value Added Calculation
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: Market value added is the result of subtracting a firm’s book value from the market value of its equity.
True or false: Market value added is the result of subtracting a firm’s book value from the market value of its equity.
True or false: Market value added and economic value added are synonymous terms.
True or false: The product of the inventory turnover ratio and the average days in inventory are equal to 365.
True or false: Economic value added is also known as residual income.
True or false: An increase in retained earnings reduces the market value added by a firm.
True or false: When the firm is debt-free, ROE is equal to ROC.
True or false: When interest expense is high, the interest earned ratio is also high.
True or false: Amortization refers to the diminishing value of intangible assets over time.
True or false: The income statement of a company provides information about its assets and liabilities during a defined time period.
What assumptions can be made about Tri-C Corp. when comparing its ratios to industry averages, where it has a higher current ratio, an average quick ratio, and a lower inventory turnover?