If you believe that one should buy and sell companies in line with their accounting figures, you should use ______ to measure value of markets.

• A.price weighted indices.
• B.fundamentally weighted indices.
• C.float-adjusted market-capitalization weighted indices.

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_______ financing is capital provided for a company that expects to go public within a year or so.

• A.Third-stage.
• B.Second-stage.
• C.Mezzanine.

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All of the following statements about accounting practices are true EXCEPT:

• A.Violation of a long-term debt covenant will cause the debt to be classified as short-term debt if the condition is not reversed before the end of the accounting period.
• B.Debt is considered to be extinguished if the firm places risk-free assets in an irrevocable trust solely for extinguishing that debt.
• C.Commitments under unconditional purchase obligations that provide financing to suppliers need not be recognized on the purchaser's balance sheet.

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A project may have multiple IRRs because

• A.it may have cash outflows at the end of the project in addition to the investment outlay at the beginning.
• B.its cash flows are received far into the future or it has negative NPV
• C.it has a small investment at the beginning and a very large cash flow at the end.

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If a monopolist increases sales from 10 to 11 by lowering its price from $40 to $38, its marginal revenue is:

• A.$2
• B.$18
• C.$418

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