Use the Table for the Question(s) Below -The Above Diagram Shows a Balance Sheet for a Certain

question 22

Multiple Choice

Use the table for the question(s) below.
$\begin{array} { l } \text { Balance Sheet }\\\begin{array} { l } \text { Assets}& \text { Liabilities}\\\begin{array}{l}\text { Current Assets }\\\hline\text { Cash } & 50 \\\text { Accounts receivable } & 22 \\\text { Inventories } & 17 \\\text { Total current assets } & 89\\\end{array}&\begin{array}{l}\text { Current Liabilities }\\\hline\text { Accounts payable } & 42 \\\text { Notes pavable/short-term debt } & 7\\\\\text { Total current liabilities }&49\\\end{array}\\\\\begin{array}{ll}\text {Long-Term Assets }\\\hline\text {Net property, plant, }\\\text { and equipment } & 121 \\ \text { Total long-term assets } & 121\\\\\\\text { Total Assets }&210\\\\\end{array}&\begin{array}{ll}\text { Long-Term Liabilities }\\\hline\\\text { Long-term debt } & 128 \\\text { Total long-term liabilities } & 128 \\\text { Total Liabilities } & \mathbf{1 7 7} \\\text { Shareholders' Equity } & 33 \\\text { Total Liabilities and } & 210 \\\text { Shareholders' Equity } &\end{array}\end{array}\end{array}$

-The above diagram shows a balance sheet for a certain company. All quantities shown are in millions of dollars. If the company has 4 million shares outstanding, and these shares are trading at a price of $8.24 per share, what does this tell you about how investors view this firm's book value?

• A) Investors consider that the firm's market value is worth more than its book value.
• B) Investors consider that the firm's market value is worth less than its book value.
• C) Investors consider that the firm's market value and its book value are roughly equivalent.
• D) Investors consider that the firm's market value is worth very much less than its book value.

---

Definitions:

Persuasive Requests

Communications intended to influence the attitudes or actions of others towards a specific outcome or decision.

Anticipate Resistance

The act of foreseeing and preparing for objections or opposition in the context of persuasion or proposal.

Adjustment

The process of modifying or altering something to achieve a desired fit, appearance, or outcome.

Product Service

A combination of tangible goods and intangible services provided to fulfill the needs or desires of customers.