Under the percentage-of-completion method:

• A.billings on construction contract are used in determining the percentage of the project completed to date.
• B.accumulated construction costs can be used in determining the percentage of the project completed to date.
• C.accumulated construction costs can be in determining the percentage of the project completed in the current year.

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In the presence of a risk-free security, the efficient frontier

• A.consisting of risky assets moves down parallel to itself.
• B.consisting of risky assets moves up parallel to itself.
• C.changes and is replaced by a straight line.

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Which one of the following statements regarding the effect of leases on financial ratios (in early years) is CORRECT?

• A.Under a capital lease, ROE is generally higher.
• B.Under an operating lease, interest coverage ratios are generally higher.
• C.Under an operating lease, leverage ratios are higher.

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A bell-shaped, symmetrical frequency distribution has a mean of 45. If 95% of the observations on the variable fall between 30 and 60, the standard deviation of the variable is:

• A.5.00
• B.7.50
• C.15.0

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Successful use of financial leverage would be illustrated when:

• A.Rate of return on sales exceeds the cost of debt
• B.Rate of return on assets (ROA) exceeds the rate of return on stockholder's equity
• C.Rate of return on assets exceeds the cost of debt

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