When a firm has fixed operating costs, operating leverage is present. In that case, an increase in sales results in a more-than-proportional increase in EBIT, and a decrease in sales results in a more-than-proportional decrease in EBIT. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The interest paid by the issuer of commercial paper is determined by the size of the discount and the length of time to maturity. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following is NOT commonly cited as a reason why management needs to understand capital markets? A) Issuing securities to acquire capital is an ongoing process. B) Active markets have developed for the trading of securities, management needs to understand how these markets impact the firm’s constantly changing shareholder base. C) Capital markets […]
Date: September 19th, 2020
Longneck Brewery Inc. has net income of $3.00 per share and a dividend payout ratio of 35%. How large is the firm’s per share dividend payment? A) $1.05 B) $1.95 C) $1.50 D) $0.35 ANSWER A Explanation: A) Div = EPS*DPO ratio = $3 * 0.35 = $1.05.
Date: September 19th, 2020
Which of the following is NOT a generally accepted method of differentiating in the financial markets? A) The Money market vs the Capital market B) The Primary market vs the Secondary market C) The Public market vs the Private market D) All of the methods above are used to differentiate in the financial markets. […]
Date: September 19th, 2020
When sizing up the marketing management of the firm, it is important to examine: A) the level of technological innovation and investment of the firm. B) the firm’s particular target market. C) the product’s critical physical and intangible attributes. D) Both B and C ANSWER D
Date: September 19th, 2020
Whenever the percentage change in EBIT resulting from a given percentage change in sales is greater than the percentage change in sales, operating leverage exists. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The risk to a U.S. importer with foreign-currency-denominated accounts payable is that the dollar will depreciate. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Which of the following is NOT a question related to marketing management and demand risk analysis? A) Is the distribution channel appropriate? B) Is the product appropriate relative to the competitors? C) How much marketing management depth does the firm have? D) Who are the firm’s target customers? ANSWER C
Date: September 19th, 2020
The closer the base sales level used is to the operating breakeven point, the smaller the operating leverage. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
