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9. Days in inventory at the end of Year 2 is closest to: A. 60.0 days B. 69.0 days C. 66.0 days D. 54.0 days. Which of the following is least likely to increase the overall risk of a company? A. Increased sales variability B. Increased debt levels C. Increased variable costs while decreasing fixed costs D. Increased interest rates 10. If a company's current ratio increases from 1.2 to 1.4 from one year to the next, and its quick ratio decrcases from 0.2 to 0.15 over the same time period, this indicates: 11. A. the liquidity must have increased. B. the accounts receivable have decreased. C. the inventory management should be further examined. D. the current liabilities have decreased. 12. All other things being equal, if a company increased its dividend payments, what would happen to the following ratios? A) Same Increase Same Increase Same Same Decrease Same Same Decrease B) C) D) A. Option A B. Option IB C. Option C D. Option D Increase Which of the following is not included in the definition of earnings persistence? A. Stability of the earnings B. Magnitude of the earnings C. Predictability of the earnings 13. D. The earnings' trend 7:01 PM I. Management's choice of accounting principle II. Management's choice of dividend policy III. Management's estimates IV. Management's discretionary expenditures 14. Which of the following can affect carnings quality? A. I, II, III, and IV B. 1, II, and III C. I, III, and IV D. I and III I5. Which of the following statements concerning quality of carnings is correct A. All other things being equal, the more cyclical the industry within which a c operates, the lower its quality of carnings. B. The smoother the earnings stream of a company, the greater the quality of th C. Quality of earnings is independent of business risk. D Quality of earnings is largely beyond management's control. 16. ABC Corporation and DEF Corporation operate in the same industry. ABC has that is 50% higher than DEF Corporation. Which of the following accounts for the difference in the observed PE ratios? I. ABC uses more conservative accounting principles. II. ABC has a higher cost of equity capital. III. ABC has higher expected future growth. IV. DEF uses FIFO and ABC uses LIFO. A. I, II, III, and IV B. I, III, and IV C. I and III D. II, III, and IV

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