QUESTION Which of the following assumptions does Ryerson have to make to support his statements? A) Some people make money by investing. B) Interest is the only thing that changes the value of a savings account. C) Most people want to save money instead of spending it. D) Companies issue stock only if there is […]
Date: September 3rd, 2020
QUESTION Greenmax’s chief financial officer likes the idea of expanding into markets in the southern hemisphere because he argues that this will help the company generate a consistent year-round cash flow. Which of the following, if true, strengthens the CFO’s argument? A) Energy drinks are popular in many different parts of the world. B) Demand […]
Date: September 3rd, 2020
QUESTION A corporate consultant concludes that a Disney business unit deserves heavy investment because three of its four product lines are highly profitable and have high market share. Which of the following, if true, most undermines this conclusion? A) The product lines making high profits sell goods with lower prices than the goods sold by […]
Date: September 3rd, 2020
QUESTION Which of the following, if true, strengthens the case for Munschausen’s seeking to acquire capital by debt financing? A) Munschausen will have very slim profit margins in its international sales. B) Munschausen will hire many new salespeople to work internationally. C) Munschausen will have a steady stream of revenue from its international sales. D) […]
Date: September 3rd, 2020
QUESTION Which of the following, if true, weakens the case for Munschausen’s seeking to acquire capital by equity financing? A) The equity capital market in Europe is currently very strong. B) Equity financiers expect a consistent return on their investments. C) Many of the companies in Germany get financing from equity capital. D) Only the […]
Date: September 3rd, 2020
QUESTION A senior manager argues that the negative perception associated with mounting credit card debt will affect StarMart. Which of the following is the LEAST effective measure StarMart could take to address this potential problem? A) publicize the company’s policies in clear and easy-to-understand language B) charge no more than the typical interest rate for […]
Date: September 3rd, 2020
QUESTION Tanya is arranging for a secured loan from a commercial bank so that her medical equipment company can purchase state-of-the-art computer systems throughout the company’s headquarters offices. As collateral for the loan, Tanya argues that the company should use its office building. Which of the following weakens Tanya’s argument? A) Tanya’s company owns a […]
Date: September 3rd, 2020
QUESTION Why do you think it is important that one of the characteristics of money is portability? What will be an ideal response? ANSWER Answer: The portability of money is important for its practicality. In other words, because it is portable, it can easily be carried around and used on the spot. In some […]
Date: September 3rd, 2020
QUESTION Aardvark is considering issuing corporate bonds in order to raise money. Which of the following, if true, strengthens the case for using corporate bonds? A) The company’s customer base has been declining. B) The company has debts that need to be paid immediately. C) The company’s main interest is in long-term solvency. D) The […]
Date: September 3rd, 2020
QUESTION What are the three functions of money? What will be an ideal response? ANSWER Answer: Money acts as a medium of exchange, as a store of wealth, and as a standard of value. Explanation: Money has three functions: (1) it acts as a medium of exchange, (2) it acts as a store of […]
Date: September 3rd, 2020
