Harry is a cynical character who thinks life is rigged against "the little guy." He says whenever you want to buy something these days, there are only a few stores that offer virtually the same thing and they basically run the table
Which industry does NOT fit Harry's definition?
A) airlines
B) automobiles
C) power utilities
D) soft drinks
E) health insurance
Answer: C
Explanation: C) Harry is describing an oligopoly. Power utilities often have virtually no competition and are usually monopolies.
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Which of the following statements is correct?
A. Bonds are always issued (sold) at their par value. B. Bonds issued at more than par value are said to be issued at a discount. C. Once bonds are issued, the bonds will trade in the bond market at-, above-, or below par value depending on changes in interest rates. D. Bondholders must hold their bonds to maturity to receive cash for their investment.
The statement of cash flows (indirect method) reports depreciation expense as an addition to net income because depreciation
A. causes an inflow of funds for the replacement of assets. B. reduces reported net income of the period but does not involve an outflow of cash for that period. C. is a direct use of cash. D. reduces reported net income and causes an inflow of cash.