TEST 1 – AFSA

Submitted to :- Dr. M.Kanchan

Submitted by : - VAIBHAV (401603028)
MBA 5TH YR.
Ans1 – (C). decrease the ROE
Ans2 - (A). the firm has a higher P/E ratio than other firms in the industry
Ans3 - (C). Understated, overstated
Ans4 - (D). 1.56 (E/P = ROE/(P/B); 1/12 = 0.13 P/B; 0.0833 = 0.13/(P/B); 0.0833(P/B) =
0.13; P/B = 1.56)
Ans5 - (A). 11.18% (ROE = (1 − 0.35)[14% + (14% − 10%)0.8] = 11.18%)
Ans6 - (B). higher incomes taxes
Ans7 - (C). The firm has a substantial amount of old plant and equipment
Ans8 - (B). the DDM uses different earnings measures in the denominator
Ans9 - (B). imputed costs
Ans10 – (D). Nonrecurring items, after-tax interest, and distortions related to accounting quality concerns.