Resources are allocated efficiently when

A) the market produces what people want.
B) economic profits are zero.
C) output is distributed in an equitable fashion.
D) output is produced in a sustainable fashion.

Armando Company owns 17,000 of the 70,000 shares of common stock outstanding of Tito Company and exercises a significant influence over its operating and financial policies. The investment should be accounted for by the

A) equity method
B) market method
C) cost or market method
D) fair value method

According to the federal Office of Consumer Affairs, ________.

A) letters from satisfied customers are the best evidence to support claims
B) failing to include important information is considered deceptive
C) marketing messages and websites cannot target children
D) offering a money-back guarantee is illegal

Which of the following statements regarding NPV analysis is correct?

A) NPV calculations do not depend critically on cash flow projections.
B) NPV calculations are only as good as the information that goes into their calculation.
C) Negative NPV projects should be scrutinized to make sure there is a sound economic basis underlying them.
D) Positive NPV projects that have relatively low levels of fixed costs should be more heavily scrutinized than projects with relatively high levels of fixed costs.
E) NPV calculations will lead to correct decision-making even if the wrong discount rate is used.

Which of the following is an inaccurate statement about the insurable interest requirement?

A) The beneficiary named in a life insurance policy may recover under the policy if she possessed an insurable interest in the relevant person's life at the time she (the named beneficiary) procured the policy but no longer possessed the insurable interest at the time the relevant person died.
B) When an equitable interest in a property translates into a legal interest,it is considered to be an insurable interest.
C) Persons who are business partners are generally held to possess insurable interests in each other's lives.
D) A policy owner may recover under a property insurance policy if he possessed an insurable interest in the relevant property at the time he procured the policy but no longer possessed the property.

Which of the following statements about the Bankruptcy Code is false?

A) The Bankruptcy Code provides an organized procedure under the supervision of state courts for dealing with insolvent debtors.
B) The Bankruptcy Code ensures that the debtor's property is fairly distributed to the creditors and that some creditors do not obtain unfair advantage over the others.
C) The Bankruptcy Code protects all of the creditors against actions by the debtor that would unreasonable diminish the debtor's assets to which they are entitled.
D) The Bankruptcy Code provides the honest debtor with a measure of protection against the demands for payment by his creditors.