Which of the following is (are) included in the market value of a firm but are excluded from the firm's book value?

Which one of the following represents the most liquid asset?    A.  $100 account receivable that is discounted and collected for $96 today B.  $100 of inventory which is sold today on credit for $103 C.  $100 of inventory which is discounted and sold for $97 cash today D.  $100 of inventory that is sold today for $100 cash E.  $100 accounts receivable that will be collected in full next week Refer to section 2.1

22.

Which one of the following statements related to liquidity is correct?    A.  Liquid assets tend to earn a high rate of return. B.  Liquid assets are valuable to a firm. C.  Liquid assets are defined as assets that can be sold quickly regardless of the price obtained. D.  Inventory is more liquid than accounts receivable because inventory is tangible. E.  Any asset that can be sold within the next year is considered liquid. Refer to section 2.1

23.

Shareholders' equity:    A.  increases in value anytime total assets increases. B.  is equal to total assets plus total liabilities. C.  decreases whenever new shares of stock are issued. D.  includes long-term debt, preferred stock, and common stock. E.  represents the residual value of a firm. Refer to section 2.1

24.

The higher the degree of financial leverage employed by a firm, the:    A.  higher the probability that the firm will encounter financial distress. B.  lower the amount of debt incurred. C.  less debt a firm has per dollar of total assets. D.  higher the number of outstanding shares of stock. E.  lower the balance in accounts payable. Refer to section 2.1

25.

The book value of a firm is:    A.  equivalent to the firm's market value provided that the firm has some fixed assets. B.  based on historical cost. C.  generally greater than the market value when fixed assets are included. D.  more of a financial than an accounting valuation. E.  adjusted to the market value whenever the market value exceeds the stated book value. Refer to section 2.1

26.

Which of the following is (are) included in the market value of a firm but are excluded from the firm's book value? I. value of management skills II. value of a copyright III. value of the firm's reputation IV. value of employee's experience    A.  I only B.  II only C.  III and IV only D.  I, II, and III only E.  I, III, and IV only Refer to section 2.1