1. (TCO 2) The purpose of the required rate of return is intended to provide investors: (Points : 3) compensation for expected inflation. a premium for risk assumed. a minimum real rate of return. all of the above 2. (TCO 2) If an individual stock has a high P/E ratio this may be misleading: (Points : 3) in an inflationary economy. if the firm is in a cyclical industry like automobiles. if the firm has a strong future growth rate. more than one of the above 3. (TCO 2) The ________ does not represent continuing operations in any way but is simply a snapshot of the total worth of a firm at a given point in time. (Points : 3) income statement balance sheet source and use of funds statement statement of cash flows 4. (TCO 2) Asset-utilization ratios measure: (Points : 3) productivity of fixed assets in terms of sales. the relationship of sales on the income statement to various assets on the balance sheet. the firms ability to pay off short-term obligations as they come due. all of the above

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