Two competing companies sell very similar products that are manufactured in plants located near each other in the United States. Company A values inventory using last-in, first-out (LIFO) and uses accelerated depreciation for plant assets. Company B values inventory using first-in, first-out (FIFO) and uses straight-line depreciation. From this information, what conclusions can an analyst draw about the gross margin reported for the two companies?

• A.The gross margin would be similar for both companies.
• B.The gross margin would be higher for Company A.
• C.The analyst cannot draw conclusions from this information.
• D.The gross margin would be higher for Company B.

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A company's Balance Sheet for the year ended Dec. 31, 2013 is as follows:

(In millions)
The company is MOST likely in which of the following industries?

• A.Civil aviation
• B.Pharmaceutical
• C.Commercial banking
• D.Retailing

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A restaurant that sells hamburgers is considering lowering prices to gain market share. The restaurant pays $3,000 a month for the building it occupies, and ingredients and labor cost $2.50 per hamburger. If the restaurant expects to sell 2,000 hamburgers a month, what is the minimum price it could charge?

• A.$4.00
• B.$3.50
• C.$3.00
• D.$2.50

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Which of the following options is an example of an expense?

• A.Consumption of $500 of electricity for the head office building
• B.Payment of $6,000 for vehicle insurance covering the next year
• C.Purchase of a new vehicle for $30,000 by a delivery company
• D.Purchase of $10,000 of fabric to be used by a clothing manufacturer

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The graph below reflects which of the following situations in the market for apples?

• A.There is a shortage of apples.
• B.The government introduces a tax on oranges.
• C.New equipment decreases the costs of harvesting apples.
• D.A new disease kills apple trees.

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