Max's Tire Center Company

question 49

Multiple Choice

Max's Tire Center Company
Selected data from the financial statements of Max's Tire Center are provided below.

- Refer to the selected data provided for Max's Tire Center. Which of the following would result from a horizontal analysis of Max's balance sheet?

• A) Fixed assets increased by $12,000 or 8.7% during 2012.
• B) Fixed assets increased by $12,000 or 7.8% during 2012.
• C) Fixed assets is 30.0% of total assets in 2012.
• D) The total assets is $500,000 in 2012.

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Definitions:

Moral Hazard

A situation where one party engages in risky behavior or lacks incentive to guard against risk because another party bears the consequences of that behavior.

Risk Efficiently

The optimal management of risk to maximize returns relative to the level of risk taken.

Flood Insurance

A type of insurance policy that covers property loss and damage due to flooding, often required in high-risk flood areas.

Flood Plains

Flat areas adjacent to rivers and streams that are subject to periodic flooding, often characterized by fertile soil.