Correct Answer: C

Rule: Where the partnership agreement is silent, losses are shared in the same proportion as profits.

Choice "c" is correct. Vick was entitled to 30% of the profits and so will be responsible for 30% of the

undistributed $30,000 loss, or $9,000.

Choices "a", "b", and "d" are incorrect, per the above rule.

Correct Answer: C

Choice "c" is correct. Absent an agreement to the contrary, if a member of an LLC dies, the LLC is

dissolved unless the other members consent to continue.

Choice "a" is incorrect, because the LLC does not have to dissolve upon the death of a member.

Choice "b" is incorrect, because the LLC does not cease to exist immediately.

Choice "d" is incorrect, because the LLC does not continue unless the members consent to continue.

Correct Answer: C

Choice "c" is correct. The bylaws usually contain the rules for running the corporation.

Choices "a" and "b" are incorrect. These are possible choices, but not as good an answer as "c". A

corporation's articles of incorporation (called a charter in a few states) must set out certain information

relevant to formation of the corporation, but it may include any other information that it is not illegal.

However, usually details about intracorporate power are set out in bylaws rather than in the articles or

charter.

Choice "d" is incorrect. A proxy statement is a request to shareholders to allow their shares to be voted by

a specified person in a specified way. It has nothing to do with a corporate president's authority.

Correct Answer: C

Choice "c" is correct. Major competitors and substantial capital requirements (high barriers to entry) are

oligopolistic market conditions.

Choice "a" is incorrect. Pure competition has small barriers to entry and numerous suppliers.

Choice "b" is incorrect. A natural monopoly suggests that economic conditions allow only one supplier for

efficiency purposes.

Choice "d" is incorrect. Monopolistic competition has easier barriers to entry and more firms competing to

supply the market than oligopoly.

Correct Answer: C

Choice "c" is correct. Setting a ceiling price below the price dictated by market forces (which is the

equilibrium price set by the supply and demand curves) would create excess demand for the product (at its

reduced price) and, consequently, a shortage.

Choice "a" is incorrect. A surplus would be produced if a floor price (under which no supplier could sell)

were set above the equilibrium price, because suppliers would supply excess product at the inflated price.

Choices "b" and "d" are incorrect, per the above Explanation.

Correct Answer: A

Choice "a" is correct. As a foreign competitor's currency becomes weaker compared to the U.S. dollar, the product becomes less expensive in U.S. dollars. The less expensive product will have the advantage in the

U.S.

market. Choice "b" is incorrect. As a foreign competitor's currency becomes weaker compared to the

U.S.

dollar, the product becomes less expensive in U.S. dollars. The less expensive product will have the advantage in the U.S. market, not a disadvantage. Choice "c" is incorrect. Foreign currency exchange rates impact both sales and possibly cost of goods sold of a competing domestic company. Sales within U.S. markets will deteriorate as the currency of foreign competitors deteriorates and makes the domestic company's goods more expensive. As a foreign competitor's currency appreciates, sales within U.S. markets by a domestic company should also increase as goods manufactured in the U.S. become less expensive. Cost of goods sold may fluctuate if foreign suppliers are used. Choice "d" is incorrect. It is better for a U.S. company when the value of the U.S. dollar weakens, not strengthens. A weak U.S. dollar makes domestic goods relatively less expensive that imported goods.

Correct Answer: A

Choice "a" is correct.

Choices "b", "c", and "d" are incorrect based on the above Explanation.

Correct Answer: C

Choice "c" is correct. The annual savings needed to make the investment realize a 12% yield is where the present value of the cash savings/inflows equals the present value of the net cash outflows. Use algebra to calculate the annual savings, as follows:

Choice "a" is incorrect. The annual savings needed to make the investment realize a 12% yield is where

the present value of the cash savings/inflows equal the present value of the net cash outflows. Choice "b"

is incorrect. Subtract the present value of $10,000 due in 5 years at 12%, or $10,000 ?.57 = $5,700. Don't

subtract the entire $10,000.

Choice "d" is incorrect. Subtract the present value of the $10,000 residual value from the $50,000 cost.

Correct Answer: B

Rule: Relevant costs are only those costs that will differ among many alternatives.

Choice "b" is correct. The disposal price of the old equipment is most relevant because it is an expected future inflow that will differ among alternatives. If this old equipment is replaced, there will be a cash inflow from the sale of the old equipment. If the old equipment is kept, there will be no cash inflow from the sale of the old equipment. Choice "a" is incorrect. The original cost of the old equipment is a sunk cost and, therefore, not relevant. Choice "c" is incorrect. The gain or loss on the disposal of the old equipment is not relevant. The gain or loss is an accounting computation that combines the book value, which is always not relevant, and the disposal value, which is relevant. The result is meaningless to future decisions and, therefore, is not relevant. Choice "d" is incorrect. The book value is not relevant to future decisions because the undepreciated sunk cost of an asset will only reduce net income in the future as either depreciation expense or as a loss on disposal.

Correct Answer: D

Choice "d" is correct. If a firm increases its cash balance by issuing additional shares of common stock, working capital increases and the current ratio increases.