some final questions

[zero]

1 - do the sharpe ratio and the coefficient of variation use the arithmetic or the geometric mean ?

2 - if a company sells equipment for $30k, paid 110k for it several years ago and it had 70k accumlumate depreciation at the time of sale, the equipment sale will reult in cash flow from:

a) investing decreasing by 10k
b) investing increasing by 30k
c) operating activities being 10k less than net income
d) operating activities being 30k more than net income

 

[ditchdigger2CFA]

1. Arithmetic

2. B. The book value of the equipment would have been $110,000 - $70,000 = $40,000 at the time of sale, so a loss of $10,000 for financial statement purposes would be realized. The net loss would reduce net income and would be adjusted in the statement of cash flows by adding the net loss to net income. The total amount of the proceeds $30,000 would be shown as a cash inflow from investing activities.



Edited 1 time(s). Last edit at Friday, December 5, 2008 at 03:05AM by ditchdigger2CFA.

 

[zero]

thanks