If your new business (in which you have invested $50,000, which you previously kept in savings, earning 10% interest) earns an accounting profit of $30,000 in the first year, and you had previously been employed as a ditch-digger, earning $10,000 per year, your economic profit is:

• A.-30,000.
• B.15,000.
• C.$20,000.

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You have a portfolio of 4 stocks, A, B, C and D.
Exactly 25% of your capital is invested in each stock.
E(RA) = 15%, E(RB) = 12%, E (RC) = 10% and E(RD) = 8%. The expected return on the portfolio is:

• A.12%.
• B.11.25%.
• C.10.75%.

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If the Laspeyres index is 120, the Paasche index is 115, then the Fisher index is:

• A.117.5.
• B.117.47.
• C.235.

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In periods of rising prices and stable or increasing inventory quantities, the impact of LIFO and FIFO on income before taxes is:

• A.LIFO results in lower income.
• B.FIFO results in lower income.
• C.The choice of LIFO vs. FIFO does not affect income.

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A company's quick ratio:

• A.Indicates the length of time the company takes to pay its short-term creditors.
• B.Can never be larger than its current ratio at the same date.
• C.Indicates how quickly the company converts its current assets to cash.

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