The structure of competitive forces establishes the profitability of an industry. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
________ is/are a short-term, generally unsecured. corporate IOUs issued by the “most credit-worthy” firms. A) Repurchase agreements B) Commercial paper C) Negotiable CDs D) Treasury bills ANSWER B
Date: September 19th, 2020
Due to regulatory capital requirements, there tends to be a concentration of preferred shares in the ________ industry. A) airline B) railroad C) power generation D) banking ANSWER D
Date: September 19th, 2020
A major assumption of breakeven analysis and one which causes severe limitations in its use is that ________. A) fixed costs really are fixed B) total revenue is nonlinear C) revenues and operating costs are linear D) all costs are really semi-variable ANSWER C
Date: September 19th, 2020
The effective interest rate generally is ________. A) higher on a loan if interest is paid at maturity B) lower if the loan is a discount loan C) higher if the loan is a discount loan D) not affected by whether the loan is a discount loan or a loan with interest paid at maturity […]
Date: September 19th, 2020
Due primarily to concerns about financial distress, we tend to see very few firms financed with ________ or more of their capital structure as debt. A) 20% B) 35% C) 55% D) 70% ANSWER D
Date: September 19th, 2020
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
Date: September 19th, 2020
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
Date: September 19th, 2020
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 […]
Date: September 19th, 2020
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
Date: September 19th, 2020
