1. Which of the following statements relating to Market Efficiency is most correct?

Select one:

a. Small companies are generally highly efficient.

b. Small companies always maintain good communications with investors and analysts.

c. Larger companies are generally highly inefficient.

d. Larger companies tend to be highly efficient and maintain good communications with investors and analysts.

2. Which of the following transactions would decrease a firm’s Current Ratio?

Select one:

a. Common Stock is issued, resulting in the acquisition of cash.

b. A fixed asset is sold for cash.

c. Payment of a cash dividend.

d. Merchandise is sold for cash.

3. You are advising a firm that is considering a change to its depreciation schedule from 5 year depreciation to 10 year depreciation. All else remaining constant, what effect would this change have on taxes paid?

Select one:

a. Taxes paid would increase; due to less depreciation each year.

b. Taxes paid would decrease; due to more depreciation each year.

c. There would be no change in amount of taxes paid.

d. Doing this is a felony and the CFO and CEO would be subject to imprisonment.