Lark art company sells unfinished wooden decorations at a price of

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Lark Art Company sells unfinished wooden decorations at a price of $15.00. The current profit margin is $5.00 per decoration. The company is considering taking individual orders and customizing them for sale. To finish the decoration the company would have to pay additional labor of $3.00, additional materials costing an average of $4.00 per unit and fixed costs would increase by $1,500. If the company estimates that it can sell 600 units for $25 each month, would they make additional profits or losses? Select one: a. $300 profit b. $300 loss c. $800 profit d. $800 loss

a) Current ratio. (b) Accounts receivable turnover. (Assume the prior year’s accounts receivable balance was $100,000.) (c) Days’ sales uncollected. (d) Inventory turnover. (Assume the prior year’s inventory was $50,200.) (e) Times interest earned ratio. (f) Return on common stockholders’ equity. (Assume the prior year’s common stock balance was $480,000 and the retained earnings balance was $128,000.) (g) Earnings per share (assuming the corporation has a simple capital structure, with only common stock outstanding). (h) Price earnings ratio. (Assume the company’s stock is selling for $26 per share.) (i) Divided yield ratio. (Assume that the company paid $1.25 per share in cash dividends.) Income statement data: Sales (all on credit) $1,075,000 Cost of Goods Sold 575,000 Gross Profit on Sales $ 500,000 Operating Expenses 305,000 Operating Income $ 195,000 Interest Expense 20,400 Income Before Taxes $ 174,600 Income Taxes 74,000 Net Income $ 100,600 Balance sheet data: Cash $ 38,400 Accounts receivable 120,000 Inventory 56,700 Prepaid Expenses 24,000 Total current assets $ 239,100 Total plant assets 708,900 Total assets $ 948,000 Accounts payable $ 91,200 Interest payable 4,800 Long-term liabilities 204,000 Total liabilities $ 300,000 Common stock, $10 par 480,000 Retained earnings 168,000 Total liabilities and equity $ 948,000

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July 1, 2023

121.In the context of the 1997 Asian crisis, how did the International Monetary Fund's “one-size-fits-all” approach to macroeconomic policy affect South Korea?

A. It led to a decrease in the interest rates of short-term loans.

B. It made it difficult for companies to service their excessive short-term debt obligations.

C. It decreased the probability of widespread corporate defaults.

D. South Korea failed to recover from its financial crises.

E. South Korea was forced to increase restrictions on foreign direct investment.

122._____ arises when people behave recklessly because they know they will be saved if things go wrong.

A. Systemic risk

B. Moral hazard

C. Ethical dilemma

D. Tragedy of the commons

E. Risk compensation

123.Jade, a working professional, began driving rashly ever since she got her car insured against damage. She believed that the insurance claim would cover her in case of any accidents. Jade’s behavior is due to a situation known as _____.

A. cognitive dissonance

B. conflict of interest

C. systemic risk

D. moral hazard

E. tragedy of the commons

124.The International Monetary Fund been criticized for:

A. its lack of “one-size-fits-all” approach to macroeconomic policy.

B. encouraging moral hazard among banks.

C. its lack of power and authority.

D. using external experts to gain knowledge about a country.

E. keeping its operations open to outside scrutiny.

125.According to the critics of the International Monetary Fund (IMF), how should the problem of moral hazard exhibited by banks be resolved?

A. The IMF should use a “one-size-fits-all” approach to macroeconomic policy.

B. The IMF should establish a mechanism for accountability.

C. The IMF should free all banks from the obligation of financial reporting.

D. The banks should be forced to pay the price for their rash lending policies.

E. The IMF should bail out the banks whose loans gave rise to financial crises.

126.According to the noted economist Jeffrey Sachs, the International Monetary Fund should:

A. not be accountable to anyone as it is a powerful institution.

B. bail out the banks that have rash lending policies.

C. have a “one-size-fits-all” approach to macroeconomic policy.

D. keep its operations open to greater outside scrutiny.

E. lend only to countries with safe credit ratings.

127.The International Monetary Fund programs have been counterproductive, or only had limited success in _____.

A. Turkey

B. Iceland

C. Greece

D. Ireland

E. Latvia

128.In response to the global financial crisis of 2008–2009, the International Monetary Fund began to:

A. exercise tight controls on fiscal policy of the borrowing countries.

B. encourage activities that resulted in high inflation rates.

C. display inflexibility in policy responses.

D. urge countries to adopt policies that included fiscal stimulus and monetary easing.

E. adopt a “one-size-fits-all” approach to macroeconomic policy.

129.Which of the following observations about the International Monetary Fund (IMF) is true?

A. The IMF can force countries to adopt the policies required to correct economic mismanagement.

B. Internal political problems can affect a government's commitment to taking corrective action in return for an IMF loan.

C. In recent years, the IMF has begun to make its policies more tight and inflexible.

D. In response to the global financial crisis of 2008–2009, the IMF began to adopt a “one-size-fits-all” approach to macroeconomic policy.

E. In recent years, the IMF has begun to urge countries to oppose fiscal stimulus and monetary easing.

130.Which of the following poses a problem for international businesses in the long run?

A. Using exchange rate instruments like the forward market and swaps

B. Volatility of global exchange rate regime

C. Anti-inflationary monetary policies

D. Maintaining strategic flexibility by dispersing production to different locations

E. A policy of reduction in government spending