H19-315-ENU Practice Questions

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NEW QUESTION: 1
A key problem with return on equity as a measure of comparative performance is:
A. that return on equity ignores the effect of leverage on returns to shareholders
B. that return on equity measures do not account for interest and taxes
C. that return on equity are not adjusted for cash flows being different from accounting earnings
D. that return on equity is not adjusted for risk
Answer: D
Explanation:
Explanation
The major problem with using return on equity as a measure of performance is that return on equity is not adjusted for risk. Therefore, a riskier investment will always come out ahead when compared to a less risky investment when using return on equity as a performance metric.
Return on equity does not ignore the effect of leverage (though return on assets does) because it considers the income attributable to equity, including income from leveraged investments.
Return on equity is generally measured after interest and taxes at the company wide level, though at business unit level it may use earnings before interest and taxes. However this does not create a problem so long as all performance being covered is calculated in the same way.
Cash flows being different from accounting earnings can create liquidity issues, but this does not affect the effectiveness of ROE as a measure of performance.

NEW QUESTION: 2
Defense Department analysts worry that the ability of the United States to wage a prolonged war would be seriously endangered if the machine-tool manufacturing base shrinks further. Before the Defense Department publicly connected this security issue with the import quota issue, however, the machine-tool industry raised the national security issue in its petition for import quotas.
Which of the following, if true, contributes most to an explanation of the machine-tool industry's raising the issue above regarding national security?
A. The machine-tool industry encountered difficulty in obtaining governmental protection against imports on grounds other than defense.
B. When the aircraft industries retooled, they provided a large amount of work for tool builders.
C. A few weapons important for defense consist of parts that do not require extensive machining.
D. Several federal government programs have been designed which will enable domestic machine-tool manufacturing firms to compete successfully with foreign toolmakers.
E. The Defense Department is only marginally concerned with the effects of foreign competition on the machine-tool industry.
Answer: A
Explanation:
Explanation/Reference:
Explanation:

NEW QUESTION: 3

A. Option C
B. Option D
C. Option B
D. Option A
Answer: C,D

NEW QUESTION: 4
새로운 보안 이니셔티브에 대한 비용 편익 분석 (C8A)의 결과는 무엇을 제공합니까?
A. 정량화 가능한 근거
B. 위험 평가
C. 기준 개선
D. 공식 수락
Answer: A