A New Task Purchasing Decision Involves

question 69

Multiple Choice

A new task purchasing decision involves:

• A) re-ordering from the same vendor
• B) ordering new materials from the same vendor
• C) upgrading the computer system
• D) buying an expensive good or service for the first time

Comprehend the costs associated with forming a corporation and managing its equity.

Recognize how treasury stock transactions affect a corporation's financial statements.

Understand dividends, including dividends in arrears and stock dividends, and their impact on stockholders' equity.

Grasp the rights and privileges of common shareholders, including preemptive rights.

---

Definitions:

Debt-to-Total-Assets Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by its total assets, showing what portion of the assets is financed by debt.

Net Income

The remaining earnings of a business following the deduction of all expenses and tax liabilities from its total revenue.

ROE

Return on Equity is a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how well a company utilizes investments to generate earnings growth.

Current Ratio

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, by comparing a company's current assets to its current liabilities.