A firm has fixed operating costs of $150,000, total sales of $1,500,000, and total variable costs of $1,275,000. The firm’s operating breakeven point in dollars is ________. A) $150,000 B) $176,471 C) $1,000,000 D) $1,425,000 ANSWER D
Date: September 19th, 2020
A firm is considering whether to out source some aspects of the manufacturing of its products. Which one of the Six P’s of Operations is the firm addressing? A) Product quality B) Process C) Plant D) People ANSWER B
Date: September 19th, 2020
________ are the residual claimants of a firm’s cash flows. A) Preferred shareholders B) Common shareholders C) Bondholders D) Bankers ANSWER B
Date: September 19th, 2020
Most commercial paper is UNSECURED. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
One important principle that financial managers try to follow is to match short-term sources of funds with long-term uses of funds. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
In the United States, a corporation’s board of directors is elected by: A) bondholders only. B) bondholders and preferred stockholders C) bondholders, preferred stockholders, and common stockholders. D) common stockholders only. ANSWER D
Date: September 19th, 2020
A firm has fixed operating costs of $253,750, a sales price per unit of $100, and a variable cost per unit of $65. The firm’s operating breakeven point in dollars is ________. A) $725,000 B) $700,000 C) $906,250 D) $390,385 ANSWER A
Date: September 19th, 2020
A firm arranges a discount loan at a 12 percent interest rate, and borrows $100,000 for one year. The stated interest rate is ________ and the effective interest rate is ________. A) 12.00%; 12.00% B) 13.64%; 12.00% C) 12.00%; 13.64% D) 12.00%; 10.71% ANSWER C
Date: September 19th, 2020
In a revolving credit agreement, the firm pays interest on ________. A) the full line of credit B) the unused portion of the line of credit C) the amount actually borrowed and compensating balance D) the amount actually borrowed and commitment fees on any unused portion of the loan ANSWER D
Date: September 19th, 2020
Under U.S. Bankruptcy code, claims against the firm are prioritized along the lines of secured creditors followed in order by: A) preferred stock holders, common stock holders, and then unsecured creditors after all others have been compensated. B) unsecured creditors, preferred stock holders, and then common stock holders after all others have been compensated. C) […]
Date: September 19th, 2020
