1. Which one of the following relationships is correct?
Equity multiplier = 1 - Debt-equity ratio
Total asset turnover = 1 + Capital intensity ratio
Inventory turnover = Sales / Average inventory
Return on equity = Return on assets × Equity multiplier
2. Which one of the following has the largest effective annual rate?
8% compounded annually
8% compounded monthly
8% compounded weekly
8% compounded daily
3. A firm has $900 millions of current assets, including $300 millions of inventory. It has $500 millions of current liabilities. What's the firm's current ratio?
0.60
1.20
1.40
1.80