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The capitalization of interest （versus expensing) will have which of the following effects on a

The capitalization of interest (versus expensing) will have which of the following effects on a company’s financial ratios？

A. Lower interest coverage ratio.

B. Lower debt-to-equity ratio.

C. Higher asset turnover ratio.

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更多“The capitalization of interest…”相关的问题

第1题

Based on recently complied projections, management expects that the book value of Asset X will not

be recovered. The following information for Asset X is available:

In accordance with IFRS, the amount of the write-down is closest to:

A. $24,346.

B. $24,465.

C. $47,428.

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第2题

The following are excerpts from Bao, Inc. financial statements related to its fixed assets activity for

the fiscal year ended June 30, 2004 ($million):

Assuming the firm uses straight line depreciation, the average age and the average depreciable life of Bao’s fixed assets are closest to:

A. 7 years for average age and 20 years for average depreciable life.

B. 6 years for average age and 14 years for average depreciable life.

C. 6 years for average age and 20 years for average depreciable life.

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第3题

Lazlo Ltd, a European－based telecommunications providers, follows IASB GAAP and capit

Lazlo Ltd, a European-based telecommunications providers, follows IASB GAAP and capitalizes new product development costs. During 2012 they spent €25 million on new product development and reported an amortization expense related to a prior year’s new product development of €10 million. Other information related to 2012 is as follows:

An analyst would like to compare Lazlo to a US-based telecommunications provider and has decided to adjust their financial statements to U.S.GAAP. under U.S.GAAP, and ignoring tax effects, the return on asset (ROA) and cash flow from operations (CFO) for Lazlo would be closestto:

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第4题

On 1 January, a company, which prepares its financial statements according to IFRS, a

rranged financing for the construction of a new plant. The company:

·Borrowed NZ$5,000,000 at an interest rate of 8%.

·Issued NZ$5,000,000 of preferred shares with a cumulative dividend rate of 6%, and

·During the first year of construction of the company was able to temporarily invest NZ$2,000,000 of the loan proceeds for the first six months and earned 7% on that amount.

The amount of financing costs to be capitalized (NZS) to the cost of the plant in the first years isclosest to:

A.330,000.

B.400,000.

C.630,000.

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第5题

A European based company follows IFRS (International Financial Reporting Standards) a

nd capitalizes new product development costs. During 2008 they spent€25 million on new product development and reported an amortization expense related to a prior year’s new product development of €10 million. Other information related to 2008 is as follows:

An analyst would like to compare the European company to a similar U.S. based company and has decided to adjust their financial statements to U.S. GAAP. Under U.S. GAAP, and ignoring tax effects, the cash flow from operations (€ millions) for the company would be closest to:

A. 265.

B. 275.

C. 290.

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第6题

A company acquires a manufacturing facility in which it will produce toxic chemicals.

The cost of the facility (exclusive of the underlying land) is $25 million and it is expected to provide a 10-year useful life, after which time the company will demolish the building and restore the underlying land. The cost of this restoration and cleanup is estimated to be $3 million at that time. The facility will be amortized on a straight-line basis. The company’s discount rate associated with this obligation is 6.25 percent. The total expense that will be recorded in the first year associated with the asset retirement obligation on this property isclosest to:

A. $163,618.

B. $224,945.

C. $265,879.

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第7题

Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise

noted.

A company has equipment with an original cost of $850,000, accumulated amortization of $300,000 and 5 years of estimated remaining useful life. Due to a change in market conditions the company now estimates that the equipment will only generate cash flows of $80,000 per year over its remaining useful life. The company’s incremental borrowing rate is 8 percent. Which of the following statements concerning impairment and future return on assets (ROA) is most accurate? The asset is:

A. impaired and future ROA increases.

B. impaired and future ROA decreases.

C. not impaired and future ROA increases.

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第8题

A company acquires some new depreciable assets. Which of the following combinations o

f estimated salvage value and useful life will most likely produce the highest net profit margin?

A. low salvage value estimates and long average lives.

B. high salvage value estimates and long average lives.

C. high salvage value estimates and short average lives.

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第9题

A Canadian printing company which prepares its financial statements according to IFRS

has experienced a decline in the demand for its products. The following information relates to the company’s printing equipment as of 31 December 2010.

The impairment loss (in C$) is closest to:

A. 0.

B. 60,000.

C. 70,000.

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第10题

A company, which prepares its financial statements in accordance with IFRS uses the r

evaluation model to value land. At the end of the current year the land value of the land has increased and will be adjusted on the balance sheet. Which of the following statements is most accurate? In the current period the revaluation of the land will:

A. increase return on sales.

B. increase return on assets.

C. decrease the debt to equity ratio.

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