Tony’s Beach T-Shirts has fixed annual operating costs of $75,000. Tony retails his T-shirts for $14.99 each and the variable cost per T-shirt is $4.99. Based on this information, the breakeven sales level in units is ________. A) 7,500 B) 15,030 C) 5,003 D) 3,754 ANSWER A
Date: September 19th, 2020
The pecking-order model of capital structure suggests the order in which firms prefer to raise capital is: A) debt, then retained earnings, then external equity. B) retained earnings, then debt, then external equity. C) preferred stock, then debt, then external equity. D) debt, then external equity, then retained earnings. ANSWER B
Date: September 19th, 2020
Managing the firm’s supply network is important because: A) the firm is reliant on the efforts of its supply network partners in order to produce its products and/or services. B) managers must manage the supply network for efficient, responsive procurement and distribution to meet their customers’ needs. C) plant or facilities management involves ensuring sufficient […]
Date: September 19th, 2020
A firm arranged for a 120-day bank loan at an annual rate of interest of 10 percent. If the loan is for $100,000, how much interest in dollars will the firm pay? (Assume a 360-day year.) A) $10,000 B) $30,000 C) $3,333 D) $1,000 ANSWER C
Date: September 19th, 2020
Your author describes an aspect of the 2007-2009 financial crisis concerning commercial paper and a financial instrument he refers to as an ABCP. Define an ABCP and the role it played in the financial crisis. What will be an ideal response? ANSWER The ABCP, or asset backed commercial paper market, consists of commercial […]
Date: September 19th, 2020
Rank the order of standard deviation of returns from highest to lowest for the following classes of U.S. securities for the time period 1926 – 2011. A) small stocks, large stocks, 30-year Treasury bonds, and 90-day T-bills B) large stocks, small stocks, 30-year Treasury bonds, and 90-day T-bills C) 90 -day T-bills, large stocks, 30-year […]
Date: September 19th, 2020
The major real-world benefit of debt is that interest payments are a tax-deductible expense. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
A publicly traded firm just announced that its issuing debt to finance a new project. Which of the following scenarios is most likely TRUE in a market with asymmetric information? A) The firm’s future prospects look good and they are sending a costly signal that indicates they will be able to meet higher debt obligations. […]
Date: September 19th, 2020
Mark must buy four new tires for his car. He is considering buying tires that are $25 a piece more than his regular brand, because the higher priced tires are supposed to increase his miles per gallon by 20%. If the tires are good for 48,000 miles and Mark drives an average of 1,000 miles […]
Date: September 19th, 2020
When sizing up the operations of the firm, it is important to examine all of these EXCEPT: A) the current labor environment. B) the skill level of the firm’s work force. C) the capacity of the firm’s plant or facilities. D) None of the above. ANSWER D
Date: September 19th, 2020
