Collateral is typically required for a ________. A) secured short-term loan B) line of credit C) short-term, self-liquidating loan D) single-payment note ANSWER A
Date: September 19th, 2020
The relative inexpensiveness of debt capital is due to the fact that the lenders take the least risk among the long-term contributors of capital. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A firm’s capital structure is the mix of short-term liabilities and long-term debt. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Stanton, Inc. wants to analyze the NPV profile for a five-year project that is considered to be very risky. The project’s initial outlay or cost is $80,000 and it has respective cash inflows for years 1, 2, 3, 4 and 5 of $15,000, $25,000, $35,000, $45,000 and $55,000. Stanton wants to know how the NPV […]
Date: September 19th, 2020
According to the composite sources-and-uses data presented in Chapter 1, the main net source of funds for U.S. nonfinancial firms over the years 1980-2000 is: a. proceeds from debt offerings. b. proceeds from equity offerings. c. retained earnings (net cash flow from operations). d. sales of investments (net of increases in investments). ANSWER […]
Date: September 19th, 2020
Ace, Inc. is considering Project A and Project B, which are two mutually exclusive projects with unequal lives. Project A is an eight-year project that has an initial outlay or cost of $18,000. Its future cash inflows for years 1 through 8 are the same at $3,800. Project B is a six-year project that has […]
Date: September 19th, 2020
Allied, Inc. is considering Project A and Project B, which are two mutually exclusive projects with unequal lives. Project A is an eight-year project that has an initial outlay or cost of $180,000. Its future cash inflows for years 1 through 8 are $38,000. Project B is a six-year project that has an initial outlay […]
Date: September 19th, 2020
Manhattan, Inc. is considering an eight-year project that has an initial after-tax outlay or after-tax cost of $180,000. The future after-tax cash inflows from its project for years 1 through 8 are the same at $38,000. Manhattan uses the net present value method and has a discount rate of 11.50%. Will Manhattan accept the project? […]
Date: September 19th, 2020
An appropriate collateral for a secured short-term loan is ________. A) fixed assets B) accounts receivables C) common stock in a privately-held corporation D) bank over-draft ANSWER B
Date: September 19th, 2020
Over the 20-year period of 1980-2000, the composite dividend yield of public U.S. nonfinancial firms has generally: a. increased. b. decreased. c. remained. ANSWER B
Date: September 19th, 2020
