The firm’s supply risk can best be analyzed by examining: A) the components of the firm’s operations management. B) the components of the firm’s operations management compared with the key industry success factors. C) the key industry success factors and their impact on profitability. D) the behavior of the firm’s major competitors. ANSWER […]
________ would be a common source of financing in international trade. A) Commercial paper B) Negotiable CDs C) Treasury bonds D) Banker’s acceptances ANSWER D
The cumulative feature of preferred stock means that preferred dividends cannot be paid until all common dividends have been paid. Indicate whether the statement is true or false ANSWER FALSE
A ________ guarantees the borrower that a specified amount of funds will be available regardless of the scarcity of money. A) revolving credit agreement B) mortgage loan C) short-term, self-liquidating loan D) single payment note ANSWER A
A firm has fixed operating costs of $10,000, the sale price per unit of its product is $25, and its variable cost per unit is $15. The firm’s operating breakeven point in units is ________ and its breakeven point in dollars is ________. A) 1,000; $6,250 B) 400; $10,000 C) 400; $25,000 D) 1,000; $25,000 […]
When sizing up the operations of the firm, it is important to examine: A) the quality of the firm’s products or services. B) how effective the processes are that the firm employs to operate the business. C) the capacity of the firm’s plant or facilities. D) All of the above. ANSWER D
A firm’s operating breakeven point is the point at which ________. A) total operating costs equal total fixed costs B) total operating costs are zero C) EBIT is less than sales D) EBIT is zero ANSWER D
In an M&M world with taxes, as a firm takes on ________ debt, the cost of equity ________. A) more; decreases. B) more; increases. C) less; increases. D) less; remains the same. ANSWER B
Which of the following statements is NOT true?A line-of-credit from a commercial bank: A) generally has a maximum stated amount available to the borrower. B) generally charges the borrower interest only for the amount actually utilized C) once granted generally never needs to be renewed. D) is often an alternative to and/or in addition to […]
A firm has fixed operating costs of $525,000. The sales price per unit is $35 and its variable costs per unit is $22.50. The firm’s operating breakeven point in units is ________. A) $23,330 B) $32,000 C) $42,000 D) $52,000 ANSWER C
